The pair took back most of its Wednesday losses to close lower on Thursday, re-enforcing its hold within its established consolidation zone (77.85-75.92).USDJPY has to overcome the 77.85 level and its falling trendline at 77.40 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. Unless the above view plays out, we could see the pair turning back lower towards the 75.92 level with a loss of there setting the stage for 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. Its daily RSI is bearish and pointing lower suggesting further weakness. On the upside, the pair will have to break and close above the 77.40/85 levels, its Aug 04'2011/faling 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.
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