Earlier in the week i mentioned i thought USD/JPY was running out of steam and that we should see 96.50 and possibly 94.50 sometime soon. Well, we haven’t come off as much as i would have liked but the hourly continues to look as though it is getting very heavy and i continue to look for a sharp move lower at some stage.
A quick look at the daily USD/JPY chart and in particular the technical studies, we can see that they are all working their way lower after being considerably overbought. The 200 day MA which comes in around the 100.00 level is capping proceedings nicely and attracting technical based selling.
I have also included a weekly USD/JPY chart which also fills me with a little more confidence that the USD/JPY will head lower given that the weekly technical studies are trying to turn down from overbought levels and we also have the 50 week MA coming in close to the 100.00 level also, which will see some longer term technical players looking to get short ahead of this level.
As i mentioned earlier, stops should be left above 99.60 on shorts with a view to cover part of your position ahead of 96.50 and the remainder at 95.00.
