Is Japan on continuation upward?

I was going through all my entries contemplating what I shall explore this week. 

I first looked at Dow Jones and noted that it is on its way up with potential objective of between 45,000 to 47,000. I guess that it may not be the right time to conduct a study on this counter. It was only September that I have made an entry on this. I believe that with Dow will continue to climb until the completion of the US election, which reversal will appear, after all, the trading market is always about anticipation.

What shall I research on then?

It was about 2 months ago that I made an entry on Japan situation through The curious case of JPY-Nikkei divergence on 4th August 2024. I guess it is about time that I check on this counter, then.

Fig 1. JPY weekly chart

In my last entry, I estimated the possibility of correction before further downslide (JPY strengthen against USD). Unfortunately, JPY refused to wait and in continuation without correction. While it managed to reach new low, there was a lack of momentum and reversed upward after re-bounced from its 144-week moving average support.

The question here is: Is this a correction or trend reversal?

Based on the chart, there are a lot of indications of an uptrend (check out the arrows). The issue here is that the uptrend started by the end of 2023 has a reduced level of momentum. The reversal by June 2024 witnessed a steep decline before it reached its 144-weeek moving average support.

What's more, there is a divergence on MACD, providing more justification of down trend (JPY strengthening against USD). 

I still believe that JPY is on a correction phase with resistance at 153, its 61.8% retracement and projection. It may reverse and continue downward thereafter.

On continuation downward, it is crucial to note the support at 139.58. This is the previous low which turn the neckline. Should JPY cross this level, we should see support at 125.73 with its objective at117.226.

Fig 2. Nikkei weekly chart

In my last entry, I noted Nikkei to continue its down trend with minimum objective of 32,039, considering a double top formation, with additional support from its 144-week moving average at 32,217.

The momentum of its down trend was so strong that Nikkei plunged below my estimated levels, reaching a low of 30,632. This followed by a strong recovery with a hammer candlestick indicating a reversal upward. 

While there was divergence on MACD prior to its fall, I think its predicted move might have been fulfilled. It has been climbing up since then only to congest at its 61.8% projection. I believe that it will continue upward upon breaking through this congestive level. 

There will be a few resistances ahead though. the first resistance zone between 40,970 to 41,620. The next resistance level after crossing this will be between 42,843 to 43,301. This zone will be stronger as there is a total of 3 projection resistances in this zone.