USDJPY Re-Cap
In Wk34, USDJPY had broken Y2009 low at level 84.81 and had since then traded under this water level (color blue).
In Wk35, USDJPY tried to break out from the Jun2010 DownTrend line in the early week as well as in it’s closing for the week. It seems to be trying to turn the trend by forming a sort of base at level 83.62 (color green) but it failed ultimately when going into Wk36.
USDJPY remains in downtrend and forms new low
In mid-Wk36, USDJPY broke the Wk35 base & formed a new low in Y2010 (level 83.33).
Will this be a regret or will it head towards the Y1995 record low at 79.75 ?
USDJPY has been falling to a very low price level. In the current situation, I can’t find any support level from history other than the Fib-Extention (color pink) 138.2% & 161.8%.
A contrarian move on USDJPY remains attractive
Strategy for remaining Wk36 -
From the chart, there is a “L” formed on 7 Aug at level 83.51 & a “LL” formed 12hrs ago on 8Aug at level 83.33.
If the USDJPY H1 bar closes above “L”, we may say that “LL” is the WR of “L”. And “LL” is supported by Fib-E 161.8%.
We may then wait for the price to re-trace to “L” again to go Long with Stop-Loss limited to about 20pips.
As for the target, I can’t predict now as the WR flow is not complete. But we may take the Jun2010 DownTrend line as a guide.
If we modestly take Fib-R 23.6% as our target, we have a good 4:1 reward-risk ratio. Good deal.
