Daily Market Report – Yen poised for broader increase July 18, 2017

USD/JPY additional drop on the cards

The currency pair extends the sell-off and looks too heavy to be stopped on the short term, is pressuring an important dynamic support. Is going down as the USD is weakened by the USDX’s further drop, the index is trading below the 94.70 level and could most likely will approach and reach the 94.50 psychological level in the upcoming hours.

The Yen could dominate the currency market as the Nikkei stock index decreased and failed to stay above the 20058 major static resistance. JP225 move sideways, but most likely will have a significant move in the upcoming days.

I’ve said in the previous Market Reports that the Nikkei shows some exhaustion signs as long as continues to stay much below the 20320 previous high. The index could move in range on the short term, only a valid breakdown below the 19700 static support will open the door for more declines.

Is trading in the red and could take out the support from the downtrend line (resistance turned into support) and could hit the next downside targets, represented by the 38.2% retracement level and the 150% Fibonacci line.

A valid breakdown below these levels will attract more sellers on the short term, which will drive the rate towards the 50% retracement level and towards the major confluence formed by the warning line (wl1) of the ascending pitchfork with the second warning line (WL2) of the major descending pitchfork.

The current drop is natural after the false breakout above the 23.6% retracement level and after the failure to reach the third warning line (WL3) of the major descending pitchfork. Continues to move sideways on the Daily chart, but I hope that we’ll have a clear direction very soon because the narrow movement can’t continue forever.

USD/CAD sell-off accelerates

USD/CAD extends the bearish momentum targeting the 1.2500 psychological level, looks too heavy to be stopped right now. The USD is to release the Import Prices along with the NAHB Housing Market Index and with the TIC Long-Term Purchases reports, only a very good data could save the greenback from downside.

Price plunges after the yesterday’s minor retreat, has come higher only to retest the third warning line (wl3) of the minor ascending pitchfork and now is going down towards fresh new lows. The next downside important targets are at the 1.2460 swing low and at the lower median line (lml) of the minor descending pitchfork.

Brent Oil breakout still favored

Brent Oil rallied after the yesterday’s drop and is pressuring the 48.88 static resistance, technically, a valid breakout is expected. We may have a buying opportunity if will stabilize above the $48.88 per barrel, the next upside target will be at the outside sliding line (descending dotted line), where he could find temporary resistance again.

Only a valid breakout above the sliding line (sl) will validate a broader rebound in the upcoming weeks.

By Olimpiu Tuns

Market Analyst

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