SIDELINED FOR NOW; WILL LOOK TO BUY ONLY ON TEST OF 95.00
Usd/Jpy: There are simply no attractive trade set-ups on Wednesday and as usual, we will stand on the sidelines until something really compelling presents itself. Yesterday we attempted to buy the pair at 96.35, but subsequently exited the position for a small loss in Asia after showing no follow through. Today, we will once again look to take a shot, but only in the unlikely event that the market collapses to test psychological barriers at 95.00. The 95.00 level also coincides with our favorite retracement level in the form of the 78.6% fib retrace. This is the 78.6% fib retrace off of the latest major 93.85-98.90 move. Our in-house proprietary model still shows room for additional Usd/Jpy weakness, and as such we are quite content on waiting to see any existing longs flushed out before once again looking to enter a long position. Strategy: BUY @95.00 FOR AN OPEN OBJECTIVE, STOP @93.75. Recommendation to be removed if not triggered by NY close (5pm ET) on Wednesday.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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