The FX Trader’s view – The recent downtrend in USD/JPY has been trying to find support above the prior lows of Dec-08/Jan-09. It looks as though a s/term recovery signal has now been given, and it is now time to look at some of the overhead hurdles confronting the s/term bulls.
- WEEKLY CHART:
The recovery seen earlier this year came to a halt close to the 101.66 61.8% retracement.
Currently a recovery above the main falling resistance line, and then 97.78 Aug high, is needed to clear the way for any longer term bulls.
Meanwhile the market is trying to find s/term support at/above the 87.11 low. - DAILY CHART:
In the Commodity Specialist Guide we had a Fibo projection around 88.00 (1.618 swing off prior 91.72/97.78 upswing) which has provided good s/term support.
Our initial bull sign was to be a close above the 90.30 23.6% level, which has now been seen.
We also note a recent positive RSI divergence.
The 91.72 13-Jul low and 38.2% level offer next resistance, followed by the 92.88 50% level – a reasonable near term target. However, the more interesting resistance isn’t seen until the bear channel top projection at 94.70 currently. In the Guide we are now buyers on dips back to the 89.00 area, initial stops just below the 87.98 07-Oct low, targeting a modest 91.50 for partial profits.
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