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An absence of further incriminating evidence against US President Donald Trump yesterday saw a rebound in government bonds as well as a slight recovery in equities, albeit primarily driven by biotech. Meanwhile south of the equator, the Brazilian Real ended Thursday down 9% following news that the country's president may have paid bribes.
Short term
Trade view / 31 May 2016 at 6:08 GMT

Daily sentiment overstretched for USDJPY

partner and technical analyst / 3 c analysis
United Kingdom
Instrument: USDJPY
Price target:
Market price:
Background

For the fourth week in a row, signals have continued to point higher, investors buying the market in May from close to the 200 week average for sentiment to rally towards ¥111.70, a 38% recovery to the entire 2016 losses.

While yesterday’s 1½ Big Fig gain is positive and confirming the view, a six Big Fig bounce since May’s more than 1½ year low has left daily sentiment overstretched near the 38% Fibonacci. Dips remain buying opportunities though, for a test of 38%.

Management and risk description

Buy mainly on dip and raise stop to entry if the first target is met.

Parameters

Entry: market and ¥110.90.

Stop: ¥110.68, Monday's Marabuzo line.

Target: ¥111.70, the 38% Fibonacci and ¥111.91, the 5 week top.

Time horizon: The next couple of days.


















USDJPY Weekly - 200 week average














USDJPY Monthly - topping pattern












Charts: CQG Create your own charts with SaxoTrader; click here to learn more.  

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— Edited by  Robert Ryan

Non-independent investment research disclaimer applies. Read more

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