Written By : ForexAbode.com || Saturday, 24 May 2014 02:33 GMT

USD/JPY Weekly Outlook - May 26 to 30, 2014 

USD/JPY had dropped sharply to touch 100.82 but then recovered strongly to 102.01 before closing for the week at 101.98. 

The break below 101.20 brought in some bearish sentiments in an otherwise overall neutral outlook. However, the strong support over 100.75 and more specifically 100.61 resistance turned support keeps us still neutral for USD/JPY. 

As we had mentioned during the last weekend also, overall the pair has been staying in a range between 100.75 to 104.13 for past 18 weeks. This range is clearly showing the resistance and support of the psychological levels of 105 and 100 respectively. As we had also mentioned during the last weekend, this range is 75 pips above 100.00 and 87 pips below  105.00 level and hence  suggesting almost equal distribution of the weight of the psychological support and resistance. This again goes in the favor of a neutral outlook.  

The current price-action is very close to the 55-day EMA resistance and a break over that i.e. 102.05 may bring in some more recovery. However, we still expect a very strong resistance near 102.36. This previous resistance is also just 10 pips below the 200-day moving average. Another fall cannot be ruled out till a decisive break over 102.46 does not take place. Such a break should target the next resistance zone of 102.65 to 103.01. Overall, no major recovery will be expected till the pair breaks above the 103.01. 

On the downside a support should hold at or over 100.61 to 100.75 range. Overall, till a break below 100.61 resistance, which has turned into support, does not take place, the outlook will remain neutral for downside. A decisive break below 100.61 will open the doors for further decline towards 100.10/100.25 range. This support is derived purely from the psychological aspects of approaching 100.00. This support is also aided by the support of 61.8% retracement of the move from 96.94 to 105.44. Please check an old post titled "Will USD/JPY Break The Support Pattern?" to check on the same. 

Do also check another old post titled "Short-Term Bearish Shadows For USD/JPY". 

For the longer-term perspective, our overall outlook stays bullish and we expect a decisive break over 105.00/105.44 sooner and later to have some further gains during 2014 as we had indicated in the post "USD/JPY 2014 Outlook – Is 110 a question of “when” not “whether?".

USD/JPY price-action - Various views

USD/JPY 4-hourly chart  - May 24, 2014.

USD/JPY daily chart with moving averages  - May 24, 2014.

USD/JPY daily chart - break of 200-day moving average  - May 24, 2014.

USD/JPY weekly chart indicating overall sideways moves - May 24, 2014.

USD/JPY with the support of trend line on weekly chart.

USD/JPY with daily Ichimoku cloud - May 24, 2014.

USD/JPY with MACD - May 24, 2014.

USD/JPY with ADX - May 24, 2014.

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