Dollar/Yen Remains Balanced at 50%; Shorts Fear Intervention

The Dollar/Yen remains balanced at the mid-point of the 82.88 to 85.93 range at 84.40. In addition, a Gann angle at 84.38 is providing additional support, making 84.40 to 84.38 an important support cluster. Clearly this area is controlling the short-term direction of the market at this time.

The Dollar/Yen remains balanced at the mid-point of the 82.88 to 85.93 range at 84.40. In addition, a Gann angle at 84.38 is providing additional support, making 84.40 to 84.38 an important support cluster. Clearly this area is controlling the short-term direction of the market at this time.

The choppy trading conditions in the U.S. equity markets did not help matters this morning. Prior to the U.S. opening, equities were under pressure which was helping to push the USD JPY lower. Traders were abandoning risky assets and seeking shelter in the lower yielding Japanese Yen. The sharp rally in the stock market encouraged investors to scrap this strategy, triggering a short-covering rally.

The break back to 50% of the “Intervention Rally” could be a buying opportunity for bullish Dollar/Yen traders, but it is going to take another round of intervention to get the market moving higher. Since Japanese officials intervened during the opening of the Asian markets, traders will be watching tonight to see if they do it again.

If there is no intervention, then the bears will continue to cautiously push the Dollar/Yen lower with a Fibonacci retracement level at 84.04 the next likely downside target.

A failure to intervene will make it easier for bullish Yen traders to take back control of this market especially if equity markets sell-off and traders once again look for safety in the lower-yielding Japanese Yen.

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

Disclainer: