USDJPY: The pair continues to trade within its established sideways trading range (77.85-75.92) but maintains a downside bias towards the 75.92 level. To prevent a return to that level, USDJPY has to overcome the 77.85 level and its falling trendline at 77.07 to convince the market it has put in a temporary bottom. The pair has been weakening since topping out at the 124.13 level in Jun’2007. However, below the 75.92 level will resume its long term downtrend and bring further weakness towards the 74.00 level. Further down, support stands at the 73.00 level and then the 72.00 level, representing its psycho level. On the upside, the pair will have to break and close above the 77.40/85 levels, its Aug 04’2011/falling trendline to put in a bottom and create scope for more gains towards the 80.19 level, its Aug 04’2011 high. Further out, resistance lies at the 81.47 level, its July 08’2011 high and subsequently the 82.21 level. All in all, USDJPY remains trapped within its range as it looks for a directional trigger.
