Chart Prepared by Jamie Saettele, CMT
FOREXAnalysis: I wrote yesterday that “8042/47 is resistance before the high and I’m on the lookout for exhaustion and a top the rest of this week. Even if the rally from 7712 is unfolding as an impulse (5 waves), the USD/JPY is likely to reverse after trading above 8067.” The USD/JPY high Thursday was 8146, just 2 pips shy of the 61.8% retracement of the decline from March. Elliott wave channelling and Fibonacci relationships suggest that the current level is one of importance as well. Wave 5 is equal to 61.8% of waves 1 through 3 and price closed beneath the Elliott channel after trading through it intraday. Bigger picture, the potential resistance zone extends to about 8250. 8244 is the 61.8% extension of the 7556-8417 rally from 7712 and the top of the March 2011 intervention (8246).
FOREXTrading Strategy: Based on structure of the rally from 7907, the USD/JPY may extend slightly higher but in a series of 4th and 5th waves (expect more 2 way trading). Support for Friday is 8080. COT positioning is consistent with turns towards Yen strength.
LEVELS: 8030 8059 8082 8148 8185 8244