Japanese Yen Channel is Strong Resistance (USDJPY Support)
Commentary: With channel support holding and the dominant pattern being the 3 wave decline from 124.13 to 122.09, we are looking higher. A rally through 123.55 instills confidence in the bullish outlook. A break above 124.13 exposes the next level of chart resistance from the December 2002 high at 125.73.
A confluence of Fibonacci measurements suggests that strength may persist until the 128.00 figure. The 78.6% of 135.13-101.67 is at 127.97. The 100% extension of 101.67-121.39/108.98 is at 128.70 and the 100% extension of 108.98-122.17/115.14 is at 128.33. Three long term Fibonacci measurements in close proximity to one another is rare. When this does happen, the level in question tends to act as a magnet. Limit risk to the 7/2 low at 122.6309 as positioning is extreme (specs extremely short JPY and commercials long JPY), which indicates the high probability of a reversal in the weeks ahead. Strategy: Bullish now, against 122.09, target 125.60
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