Daily Bars
Prepared by Jamie Saettele, CMT
The USDJPY is up 5 days in a row and over 5% in February. Ultimately, I am of the persuasion that a major multi decade low is in place and that weakness should be bought. Daily RSI is above 80, which has occurred just 9 times in the last 20 years. The tendency after a reading of 80 or greater is for consolidation/weakness before the uptrend resumes. The average move 3 days after a reading above 80 is -39 pips. The average move after 10 days is +155 pips. Going on levels, the upside is favored for the rest of the week above 7935 (Monday low). A drop below would trigger weakness towards 7865/95. The next upside level of interest isn’t until the July 2011 high of 8147.
Bottom Line – Allow for a dip before going higher
