USD/JPY Breaks Monday Low; Near Term Bearish Below 98.20

DailyFX

240 Minute Bars

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eliottWaves_usd-jpy_body_usdjpy.png, USD/JPY Breaks Monday Low; Near Term Bearish Below 98.20

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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FOREXAnalysis: The USDJPY dropped for a 4th consecutive day and into estimated support from the 4/17 low at 97.20. The 20 day midpoint and 3/12 high at 96.33/70 is probably a stronger level. The decline from the 4/22 high is unfolding as an impulse (5 waves). Given the tendency for USDJPY to spike into important lows (larger spikes than seen this morning), I’d not be surprised to see 96.33/70 put to work before a stronger bounce into 98.20+. Keep the bigger picture in mind. “After numerous false starts on the downside, beginning with the 2/25 collapse, traders are conditioned to buy the dip. Eventually, this mentality will aid in accelerating a nasty decline, but within a multiyear uptrend. There are a lot of levels to get through before one can be confident that a larger drop is underway. A drop below the 4/16 low at 95.65 and line parallel to the one that extends off of the 3/12 and 4/11 highs would be concrete evidence that something bigger is brewing on the downside.”

FOREXTrading Strategy: Looking to short strength…probably between 98.47 and 99.22.

LEVELS: 94.95 95.79 96.70 98.20 98.47 99.22

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