February 05, 2007 - February 09, 2007
View on USD/JPY: there is time for downward
GFSignals team (
http://www.gfsignals.com ) provides a week forecast for USD/JPY
Every week of this year brings us a new maximum. Last week the pair reached 122.20 as a new longstanding maximum. But from the next week the situation may change. Things are reaching turning point on the market which may bring to a downward USD/JPY pair trend. From the technical side the week minimum which has overridden the previous minimum is noteworthy. Following a downward trend the pair can easily reach the 118-119 region in February, holding with it an estimated upward potential to the 125 shape regions.
Last week renewed the longstanding maximums achieved a new maximum 122.10, but didn?t forget about minimums. There was no chance to stay too long over the 122 shape. The bears pressure brought to the course downswing and before last week minimum renewal from 120.20 to 120.10. This dynamics says about the risk of deeper USD/JPY course decline during the next few weeks. Last week our second script was fulfilled: (20%) ?Side exchange fluctuations within the 119.90 - 121.80 area?, but the top limit was renewed to 122.20. Examined in the last two reviews the two-month short-term upward trend linear projection from December 2006 turned out to be broken down. By the end of the week the pair classically reestablished to this line breakout region of 121.40. Now there is a strong possibility of the further pair decline.
Script 1 (60%): A correction downward trend with the 118.80-119.00 target.
We suppose a roll-back from the reached resistance line in the 121.40-80 area, decrease and a breakout of the support level of 119.90. It will lead to decrease to the 119.90 region, where the more important supports lines are situated. Here the first rebound is expected. It should not be ruled out the further decline and January, 2007 minimum achieving of 118.00. This level may hold the pair and lead to the next upward trend in the latter half of February.
Script 2 (30%): Side exchange fluctuations within the 119.90 - 122.20 area.
The pair may easily stay at the current fluctuations range of 119.90 - 122.20. And nevertheless one of the limits breaking will lead to the other two scripts developments.
Script 3 (10%): An upward trend continuation with the 125.70 target.
In spite of the bears spirits increase and a high possibility of correction development we don?t exclude a possibility of the further USD/JPY pair increase. An upward 122.20 breakout will make for it, especially after the next rebound from the support line in the 119.90-120.10 area. The nearest target is 123.00/50 then.
Resistances
121.40/80 - the local resistance of the broken down upward trend line from December, 2006
122.20 - the January, 2007 maximum
125.80 - the local 2002 year resistance
135.00 - the longstanding maximums level in the beginning of 2002 year
Supports
120.10/20 ? the last two weeks support area
119.90 - the broken up maximum of 2006 year
118.90 ? the important supports lines region
118.00 - the January, 2007 minimum
Welcome to our new section,
Forex Economic Calendar. You will find there a Forex market events calendar with comments for the current week.