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USD/JPYClearing out Important Supoort
- Weekly and Daily: Since our last post, the USD/JPY showed no signs of rallying above the then-set short-term resistance at 89.50. Instead it broke the short-term support at 88.70. (Refer to Weekly Technical Update 11.20.2009.)
- The pair has since declined past our important support zone between 87 and 88, reaching a low of about 84.85. This is a 14-year low. (14 and 1/2 really)
- Needless to say now, we must stalk this clear-out of our 2009 low. Is is a clear-out, so in the short-term, we expect some correction, but in no way would this indicate a long-term reversal, though it could be the start.
- Contrarian minds allow opposite scenarios, one of which is a reversal after this clear-out. Another is that we won’t get a true reversal until hitting our 15-year low of about 82.50.
- Look for the market to break above 88.00 first and establishing that area as support before considering the bullish outlook, even in the short-/medium- term (relative to daily timeframe).
Fan Yang
Currency Analyst,
Commodity Trading Advisor
