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DBS Bank analysts suggest that there is a likelihood of placing finishing touches to a five-legged 1-2-3-4-5 rally post the Apple Inc-inspired decline to a 104.87-low for the USD/JPY pair.

Key Quotes

“One must recognise the 78.6% Fibonacci retracement of October 2018’s 114.53-high to 104.87 which stands out at 112.46. Suffice to say, hold focus point 5 for now.”

“One should expect 112.46 and even a minor resistance of 112.19 to hold the top together. But it might not necessarily mean the end of an uptrend that has been brewing since that dip at 104.87.”

“By all means, USD/JPY is steadying a ratchet to configure a five-legged 1-2-3-4-5 up-channel move on daily chart. While current move may have limiting tendencies, once a decline to 4 completes, USD should try once more to hinge for 5 – this intersects with the resistance line that perches at 113.02. However, a stronger USD can stretch a 1.618% extension into 114.82.”

“Interim support sits into 111.35 before the channel support rigged in around 110.66, with a mid-Donchian Channel support at 110.81.”

“The onus is on USD to regroup into channel support for one more fling higher, but a loss in quick succession under 109.46 and 108.66 would question USD bulls’ resolve – we would mark them as invalidation points.”