USD JPY Confirms Weekly Reversal Bottom

This week the USD JPY confirmed last week’s closing price reversal bottom with a follow-through rally to the upside.

This week the USD JPY confirmed last week’s closing price reversal bottom with a follow-through rally to the upside. The primary catalyst behind the Dollar/Yen rally was the interest rate differential. Treasury Bond yields rose this past week while Japanese rates held steady. The increased spread helped draw investors into the Dollar. Compounding this incident was a hard sell-off in equities and the shedding of risky assets.

Technically, the weekly main trend remains down, but the confirmation of the closing price reversal bottom is a sign of higher markets to follow. Often this pattern leads to the start of a 2 to 3 week rally equal to 50% of the last major range. Based on the range of 94.98 to 80.24, the potential upside target is 87.61 to 89.35.

Contributing to this week’s bullishness was a breakout above a downtrending Gann angle at 80.98 this week. The next downtrending Gann angle is 87.98. This coupled with the Gann angle creates a resistance cluster at 87.61 to 87.98. The recent steep downtrend has created a major whole in the weekly chart which indicates this market has plenty of room to the upside.

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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