USDJPY - Mixed Signals; if 79.13 is broken, further selling

USDJPY – We warned of a possible downward correction yesterday but didn’t expect such a strong selloff. This resulted in USDJPY trading to 79.15, 61.8% pullback off gains from Feb-Mar (79.02-84.18). Furthermore, this also ‘lines up’ with a 261.8% extension of losses from 81.79-80.85. The intraday chart is also posting inside bars, highlighting the indecision at this level. However, we have lacked any follow through buying so our call is for Mixed Signals. 

Selling though 79.13, yesterday’s low, we would look for further selling. Targets would then be 78.80 and towards 78.35. A stop of 30 pips can be placed on the break.

Buying through 79.85, we would look for further buying. Targets would then be 80.15, daily cloud and towards 80.56, this week’s peak. A stop of 30 pips can be placed on the break.