• Daily: The USD/JPY dropped more than 200 pips yesterday and now tests the 78.6% retracement level – near 88.80. This was the original projection, though the market appeared to have began reversal near the 61.8% retracement area – 89.80.
• Once again, price action is very bearish so be cautious. If the market bottoms here, the stochastic would show a bullish divergence, suggesting this 3rd wave in the recent retracement decline is an exhaustion move.
• This 3-wave move is not an impulse wave, so the bullish outlook is still valid. In the near-term however, the market remains bearish, so strong confirmation will be needed to establish a reversal to the bullish outlook.

Fan Yang
Currency Analyst
Commodity Trading Advisor

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