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USD/JPY poised to break to the downside

Risk sentiment failed to recover so far with Nikkei falling in the early morning and European markets opening weak. USD/JPY is breaking below the trendline (area) drawn off of 2012 and 2016 lows. 2017 low (107.30) is another strong support area to watch. The pair looks a bit oversold in the very short term but a successful break could easily mark a couple of big figures to the downside.
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Aussie testing the long term trendline

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
Aussie's attempt to crack strong supply zone between 0.77 and 0.785 was deflected by the intersection of 2013 - 2016 trendline and 2011 - 2016 suppo…
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al_dcdemo 16 1月

UPDATE 5: Major currency pairs opened with gaps. The U.S. dollar generally opened higher, up 10 to 35 pips. The exception is the yen, which gapped about 10 pips higher, in a risk-off fashion. The outlier is the pound which opened 180 pips lower after the prospect of a hard Brexit came again to the fore over the weekend. It's a calendar-heavy week ahead, which features central bank meetings from the ECB and the BOC plus speeches from Carney, May and Yellen and other Fed officials. We'll see whether the U.S. dollar correction will continue or the bullish trend will reassert itself.

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al_dcdemo 21 1月

UPDATE 6: U.S. dollar generally moved lower against the major currencies this week. The exceptions were the yen, which was sold on rising U.S. bond yields, and the Canadian dollar which went down on BOC Poloz's remark that a rate cut remains on the table. The best performer was the pound, which rallied after May's soothing rhetoric on what was previously viewed as a "hard" Brexit. Donald Trump officially became the 45th president of the United States on Friday. The first of his actions will be the market's focus in the week ahead.

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al_dcdemo 23 1月

UPDATE 7: Sentiment from the last week continues as the U.S. dollar starts the week on the back foot. What started as a normal pullback appears to be morphing into a medium-term correction. Three rate hikes this year, as some Fed officials have been touting, seem a bit far-fetched. I'm thinking two at the most which may be closer to what majority of market participants expect. Losses against the yen and the pound are the most pronounced today but the dollar has started to claim back some ground it had lost during the Asian session.

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al_dcdemo 28 1月

UPDATE 8: It was a lacklustre week for the U.S. dollar but the corrective momentum appears to have run out of steam, particularly against the euro, the franc and the yen. Commodity currencies generally performed better but the Australian dollar is finding it diffucult to sustain gains above 0.75. The pound regained 100 DMA for the first time since the Brexit vote. Next week will be a big one with three central bank meetings (Fed, BOJ, BOE) and plenty of U.S. data, including Nonfarm Payrolls. Trump's actions will remain closely monitored.

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al_dcdemo 30 1月

UPDATE 9: U.S. president Trump issued an executive order on immigration late on Friday (early Saturday in Europe). The order led to some chaos in airports in the United States and overseas, and prompted protests and legal action. The dollar gapped lower at the open and continued to trade south in the first part of the Asian session. The impact was most visible in the risk sensitive yen while the antipodean dollars were barely moved due to Chinese Lunar New Year holidays. The pound rose about 60 pips but stalled ahead of the big figure at 1.26.

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