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USD/JPY Bulls Straining at Their Leash

Currencies / Forex Trading Mar 26, 2010 - 04:58 AM GMT

By: Seven_Days_Ahead

Currencies

Best Financial Markets Analysis ArticleLast November saw a bear break that, in the end, amounted to a type of blow-off move, with subsequent quick recovery putting the bulls in contention once more. However, there were key resistances to overcome, and one of which has just been violated…


The FX Trader’s view


 MONTHLY CHART:

In the Commodity Specialist Guide we have this year continued to note an interesting positive RSI divergence on the Monthly chart, suggesting that long term bears were tiring.

WEEKLY CHART:

On the Weekly chart note the clear falling resistance line, providing a cap on action in 2010.

This follows the false break below old 87.11 support.

This line, running through 91.70 currently, was violated yesterday (although a weekly close above this would be preferable), and now a further recovery past the 93.76 early Jan high would confirm a new bull trend was underway.

DAILY CHART:

This year’s slip back found good support from the 61.8% retracement, coinciding with the early Oct-09 low just under 88.00.

In the FX Specialist Guide we have said that a recovery/close above the 92.14 19-Feb high would provide an initial bull signal (just seen yesterday), the second being the continuation above the 93.76 Jan high.

A target area opens up – an equality target just above 97.00 (Nov-Jan upleg extended off 88.10 Feb low), the 76.4% recovery level around 97.50 and higher Fibonacci projection at 98.75.

At this stage a drop back and close below the 90.00/89.75 area would negate the current s/term positive picture.

Mark Sturdy
John Lewis

Seven Days Ahead
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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