Profit taking likely as intraday signals improve for USDJPY
This week’s signals are bearish, but with daily sentiment oversold at the 200 week average rate, as well as being close to May’s 1½ year low, the dip has been bought for sentiment to recover.
Bears are cautious at this relatively important downside target. Although buying has not provided a clear bullish reversal pattern, intraday signals have modestly improved. This should lead to some temporary profit-taking buying.
Management and risk description
Buy dip and raise stop to entry if the first target is met.
Entry: market and ¥105.67, yesterday's low.
Stop: ¥105.18, the October 2014 base.
Target: ¥106.75, a 50% recovery to the losses posted since last week's high and ¥106.96, this week's top.
Time horizon: Today only
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