Congested USD JPY Means Get Ready to Follow the Money

The bank stress test results and the slightly better than expected U.S.Jobs Report failed to get USD JPY traders excited last week as themarket ping-ponged on both sides of a retracement zone at 98.53 to99.22.

The bank stress test results and the slightly better than expected U.S. Jobs Report failed to get USD JPY traders excited last week as the market ping-ponged on both sides of a retracement zone at 98.53 to 99.22. The close on the bearside of the 50% price at 98.53 could be indicating more downside pressure next week.

The weekly swing chart indicates developing weakness as long as this pair can remain under 99.22. One swing chart projection calls for a decline to at least 93.95.

The short-term outlook is for this pair to remain congested until either the U.S. or Japanese economies start to show more definitive signs of a recovery. At that point start to follow the money because it will be indicating where the economic strength will develop.

Signs that China’s economy is starting to recover could be leading to speculation that demand for Japanese exports are ready to rise. 

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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