USD JPY Turns Main Trend Up; Could Face Profit-Taking

News that Japanese investors bought more foreign assets last monthdrove the USD JPY sharply higher on Thursday. Declining global tensionsand signs that the global recession may be bottoming fueled Japaneseinvestor demand for higher yielding assets.

News that Japanese investors bought more foreign assets last month drove the USD JPY sharply higher on Thursday. Declining global tensions and signs that the global recession may be bottoming fueled Japanese investor demand for higher yielding assets. This move should be welcomed news for the Bank of Japan which has been looking for lower Yen prices in order to stimulate the export market.

Technically, the main trend turned to up on the swing chart when the market broke through the swing top at 96.69. The buying pressure landed this market inside of a major retracement zone at 96.79 to 97.49. Now that the news is out and the market has reached this retracement zone, long-side gains may be limited to the upside. Watch for profit-taking to begin especially if this market rallies all the way to 97.49.

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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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