14 Mar 2014
Flash: USD/JPY, declines below Feb low at 100.75 favored - FXA
FXStreet (Bali) - According to David Solin, Partner at FXA, there has been no change in the long held view of a large, complex topping in USD/JPY since the May high at 103.75.
Key Quotes
"Potentially forming a rising wedge/reversal pattern over that time, leaving open scope for another few weeks (or more) of wide ranging within the pattern, and potentially even a final test (and temporary break) of the Jan high at 105.45 as part of the process."
"Note that these patterns break down into 5 legs, adding to the potential for further ranging within the pattern ahead (see "ideal" scenario in red on daily chart below). Currently, the market is tumbling from the Mar 7th high at 103.75, breaking back below the key 103.15/35 area (ceiling of bull channel since Feb 4th, bear t-line and 50% from Jan high at 105.45, a bearish false break)."
"Nearby support is seen at the base of the bullish channel (currently at 101.25/40), resistance is seen at 102.60/75 and again that key 103.15/35 area."
"With eventual declines below the Feb low at 100.75 favored, want to be short. However, with further downside potentially limited, not seen as a good risk/reward in just hitting bids here. So instead for now, would wait for near term bounce toward 102.50 to sell and then initially stopping on a close 15 ticks above that key 103.15/35 resistance area. Note was stopped on the Mar 3rd sell at 101.50 on March 5th above the bear t-line from Jan 23rd (then 102.10, closed at 102.30)."
Key Quotes
"Potentially forming a rising wedge/reversal pattern over that time, leaving open scope for another few weeks (or more) of wide ranging within the pattern, and potentially even a final test (and temporary break) of the Jan high at 105.45 as part of the process."
"Note that these patterns break down into 5 legs, adding to the potential for further ranging within the pattern ahead (see "ideal" scenario in red on daily chart below). Currently, the market is tumbling from the Mar 7th high at 103.75, breaking back below the key 103.15/35 area (ceiling of bull channel since Feb 4th, bear t-line and 50% from Jan high at 105.45, a bearish false break)."
"Nearby support is seen at the base of the bullish channel (currently at 101.25/40), resistance is seen at 102.60/75 and again that key 103.15/35 area."
"With eventual declines below the Feb low at 100.75 favored, want to be short. However, with further downside potentially limited, not seen as a good risk/reward in just hitting bids here. So instead for now, would wait for near term bounce toward 102.50 to sell and then initially stopping on a close 15 ticks above that key 103.15/35 resistance area. Note was stopped on the Mar 3rd sell at 101.50 on March 5th above the bear t-line from Jan 23rd (then 102.10, closed at 102.30)."