What remains clear about USDJPY over the last 3 weeks is that the uptrend is slowing; little progress has been made since the 93.66 high on 2/5. We are viewing this sideways trade as a Wave IV consolidation that so far is taking the form of a bullish triangle; if this consolidation turns in to a head & shoulders top the target zone laid out last week between 92-89 becomes the base case. (ch1) S/t, the hourly uptrend was both broken and the underside was then tested at 94.22. We view this test as the top of Wave d of the bullish coil but it is plausible that is the top of the right shoulder of an unfolding top. In order to stay with the more bullish interpretation prices must hold above the Wave c low at 92.25. A subsequent rally through 94.16 would then be expected to yield another rally to new highs as JPY completes the rally from 77. (c2) Levels: Support – 92.25, 92, 90.19 Resistance – 93.76, 94.16, 94.99.
Nomura