USDJPY signalling temporary counter-trend rally
Third-quarter signals to sell at 106.22 on USDJPY have been close to the high and despite last month’s 7 ½ Big Fig rally from 100.00 the Fig signals in each of the last two weeks have remained bearish. The Fig is also close to a 50% pullback to the entire 2011-15 bull-run.
These have been confirmed as rallies have been attracting sellers at the 200-week and 100-day average rates. However, last week’s losses were mostly recovered on Friday which has ended a sequence of lower daily highs and switched shorter-term signals to bullish. Any gains are likely to be temporary though as signals also suggest that this will be a counter-trend rally.
Management and risk description
Allow room to buy the dip and raise the stop to the entry point if the 1st target is met
Entry: market and 101.22, Friday's opening trade.
Stop: 99.90, just below July's base
Target: 103.80, the 13 day average rate and 104.70, the 50 day average.
Time horizon: this week.
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more