USD/JPY 102.14 is Near Term Trend Defining Level
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
-USDJPY traded to a new high for the year on Friday but reversed sharply. The high is not accompanied by a high in the Nikkei, which does the raise the possibility of a deeper drop. 3 daily reversal bars since 12/3 (2 are outside days) is also cause for concern.
-Still, the ‘trend extension’ setups described last week is valid as long as price is above 102.14. Weakness below there would open up the possibility of a deeper drop. 100.60-101.13 would be on the radar as possible support.
-A bullish objective of 105.12 is derived by calculating the measured move from the 103.37-101.61 dip. A close from Oct 2008 remains uncovered at 105.30.
Trading Strategy: Long, stop 102.10, target 105.10. Be aware that FOMC is on Wednesday.
LEVELS: 102.14 102.40 102.73 | 103.43 103.75 105.12
--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com