USD JPY Nearing Intervention Bottom at 82.88

The USD JPY lost ground during the Asian trading hoursWednesday, driving the market closer to the “intervention bottom” at 82.88.

The USD JPY lost ground during the Asian trading hoursWednesday, driving the market closer to the “intervention bottom” at 82.88.

The primary force driving the U.S. Dollar lower was the Bankof Japan’s quarterly survey of business sentiment which showed abetter-than-expected improvement in a key index known as the Tankan survey.

The survey headline index improved to +8 in September from+1 in June. Forecasts call for the index to drop to -1 in December. This is thefirst outlook in seven quarters calling for sentiment to worsen three monthsahead.

The results of the Tankan survey threaten the BoJ’s viewthat the economy will return to a sustainable growth path and deflation willend next year. The weak forecast is likely to increase the odds that the BoJmonetary committee will ease credit further at either its meeting next week orin late October.

In the meantime, the only option available to the BoJ aheadof this meeting is another round of intervention. It’s been almost two weekssince the last intervention and the market has taken back almost 80% of therally that day. Traders are looking for another intervention, but where andwhen it will take place, is the question. The line in the sand is currently 82.88

This morning the USD JPY is holding support on an uptrendingGann angle at 83.51. On the upside, resistance is at a downtrending Gann angleat 83.93 and a .618 level at 84.04. As long as this pair remains under thisresistance cluster, then look for downside pressure.

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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