Weekly Call: USDJPY – Bearish below 83.09

This quarter's forecast for USDJPY has been for a slowdown in the 3 year bear trend and some consolidation and indecision. This has been confirmed. Prices are little-changed from January's opening level and prices have tested toward both extremes of the signalled range. For this week, however, the outlook is more bearish.

 The pattern of trading on a daily basis is for bounces to fail. Fridays failure was the largest one day loss since May 2010. With increasingly negative momentum levels, the forecast for the week is for continued losses while below 83.09. Targets are for weakness through 81.34, breaking the developing trend of rising weekly lows to signal that investors are no longer buying pullbacks and further losses are likely to retest 80.23, the low trade last November then potential 79.92, the low reached in 1995.

Risk to this forecast would be buying through 83.09, the high traded on the 4th March. This should be a bullish signal that sentiment is improving again to retest the high from February at 83.99 then the high last November at 84.42.