Watch for a Bounce in the Yen

In mid-October, we alerted readers at TraderPlanet to a shorting opportunity with Japanese Yen futures

(JPYUSD). That trade played out very nicely, but the decline may now be coming to an end. It is time to start watching support areas that could become the basis for an upward reversal lasting several months.

We'll be following this and similar moves in currencies and other products very closely during the early part of 2017. See the information at the end of this post about how you can gain access to regular alerts and updates.

In the much larger picture, we believe the Yen eventually will reach beneath its 2015 low. However, in the near term, there should be an opportunity to take advantage of the volatility associated with the current sideways-upward correction that has brought the Yen generally upward since 2015. The correction should have at least one more rally in store for us.

Hulse_Dec_15.jpg

Treating the correction provisionally as a three-wave [a]-[b]-[c] move, price appears to be near the end of downward leg [b] of that series. The Fibonacci ratios among the smaller moves inside wave [b] suggest that support areas may come into play near 0.008730 (i.e., near the present area) and 0.008370. For those who trade inverse products (USDJPY), the corresponding resistance levels are 114.5 and 119.5.

Until the downward move finds a real low, it is too early to project areas where upward wave [c] might end. It is possible that [c] could reach higher than [a], but it is not required. However, the dominant 11-month cycle suggests that an upward move should persist for several months into 2017 – perhaps until spring or early summer.

You can get much more! As you make your trading plans for 2017, let us help you see the opportunities and risks. This month, we're offering a 20% discount for all new subscriptions taken for our daily analysis service, which includes regular updates for the S&P 500, crude oil, the Dollar and other currencies, precious metals, bonds, and more. If you sign up for a longer subscription period – 3 months or 6 months – the discount makes your savings even greater. Just follow this link and use the coupon code 4CCF7 to claim your discount.

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