- 4H: The previous post noted that the USD/JPY is declining towards 87.00, but was in consolidation. A bullish divergence also suggested a correction. (Refer to Daily Technical Update 3.3.2010 USD/JPY).
- If the market can reject the rally from advancing above 90.00 area. The swing to 87.00 can be immediate. However, if the market corrects further, it is likely that the pair will continue to be choppy as it has been since Oct. 2009. when the market entered sideways consolidation.
- Daily: The daily chart shows the swing projection to the 87.00 level. We see that we are currently at a cluster of fibonacci levels (123.6% and 61.8%). The market is holding this support for now, and a close above 89.00 can be an early reversal signal.
- There might be a near-term bullish attempt that can reach the 90.60 area (61.8% retracement in 4H). This would open up for a 2nd swing to our projection.
- Remember the USD/JPY has been choppy and a retracement to 61.8% does not invalidate projection to 87.00.
Fan Yang
Currency Analyst
Commodity Trading Advisor
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. CMS will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is acting as a counterparty to its clients’ transactions and as a result, CMS’ interests may be in conflict with its clients. Since CMS acts as the buyer or seller in the transaction one should carefully evaluate any trade recommendation provided by CMS or any of its solicitors. Foreign currency trading involves a substantial risk of loss and may not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.