USD/JPY ready for more weakness?

This Sunday Japan will vote a new Upper House, with the ruling party already having an overwhelming majority in the lower one. According to polls, Kuroda and Abe will get the all needed power to lead the country, something that will happen first time since 2007. Back then, the USD/JPY was trading above 120.00 levels never seen again. And in the meantime, both leaders reassure market players that they are ready to continue with their ultra lose policy of monetary easing.

Has the time come then, for USD/JPY to resume the upside?  So far nothing indicates so, according to the daily chart, although technical readings indeed favor the upside: latest June kneejerk down to 93.70 was barely corrective as the level represents the 38.2% retracement of the October/May bullish run. But the recovery stalled around a shorter Fibonacci retracement area, 78.6% retracement of its latest fall at 101.50, and the pair is having a hard time to hold above the 100.00 level these past couple of weeks.

Elections however, are those kind of events that can trigger a couple hundred rally in a day, and set a new outlook for a pair, and this weekend elections may be no exception: if current leaders get the overwhelming majority suggested by polls, the pair can easily breach the 101.50 resistance on Monday,  and once there, the way towards 103.70 yearly high, will be open. But steady gains above that 101.50 are a sine qua non condition to confirm the pair is ready to resume the upside.

On the other hand, summer in the north hemisphere keeps majors ranging, and boards with no actual volume: if 101.50 contains any attempt of advance further, the pair will continue hovering below 100.00, with a strong support around 98.20/80 price zone for the upcoming week.

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