James ChenChief Technical Analyst
FX Solutions
8/06/2008 – USD/JPY – After much anticipation, price on the USD/JPY daily chart, as shown, has just made a swift breakout above the key resistance level around 108.50-108.60. This break is significant, as price had been bumping up against this level since February without a breakout. Now that it has occurred, if there is continued follow-through and upward momentum on the break, price should meet significant resistance at or near the uptrend line (in green) that has served alternately as support and resistance since March. Any retracement on the current bull run, on the other hand, should now meet support around the broken 108.50-108.60 level, as prior resistance should subsequently become support.
1 comment:
The USD/JPY has retraced to its January level in an ascending wedge pattern, so it will now likely fall lower, just like the EUR/JPY which today fell lower in an Elliott Wave 3 of 3 Decline.
The fall of the USD/JPY will boost the yen which will be destructive to wealth globally, giving extra forceful punch to the Elliott Wave 3 Down in the EUR/JPY.
The author in Calendar Yen Trading Patterns provides historical record that EUR/JPY and USD/JPY is frequently down in the month of August.
Today's action in the USD/JPY definitely is contrary to the seasonal norm; but, I expect the dollar to weaken even against the yen starting tomorrow as the US Dollar is oversold having risen parabolically to retracement of late February trading.
So this the up today is a pop that should be sold.
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