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Yen Technical Outlook

Tuesday, 26 August 2008 14:09:28 GMT

Written by Jamie Saettele, Senior Currency Strategist

Shorter term, the USDJPY is in a consolidation that has taken the form of a head and shoulders top. 

Coming under 108.98 would warrant a bearish bias against 110.00.  Keep in mind the bigger picture that calls for a top and reversal in wave 2 and eventual decline below 95.72.  We of course can not confirm that wave 2 is complete at 110.65 but the rally from 95.72 retraced a bit more than 50% of the 124.13-95.72 decline.  50% is a common level for wave 2 to end.

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