Inside the Currency Market: USD/JPY

USD/JPY. Two big points exists above 125.15 and 125.62. Below big bases exist at 112.95 and 112.68. Further out, bottoms exist at 109.38 and 108.43 and tops at 129.23 and 130.36. Further out points may take an interest rate decision by the Fed before upper and lower levels are considered. Ranges are found for USD/JPY at 242 and 130 pips. Ranges are fairly slim compared to 500 and 600 pip ranges for EUR/USD. At 242 pips based on the 119.05 close then price ranges are found above at 121.47 and 116.63 below to offer a rough context where we stand. USD/JPY is far more oversold than overbought and USD/JPY has a far distance yet to travel before a significant top is seen. If Big Sis Yellen raises Fed Funds, volatility should jump far higher than what we’ve ever seen in the past because the far disparity that would exist between and among nations interest rates will be wide. USD/JPY will also see the volatility benefit.

USD/JPY. Bottom. 118.30. Range break above 119.36 and 119.34, Below 118.42, 117.86. Overbought sell point 119.75. Strategy. Longs above 118.91, Target 119.75. Then reverse short to 119.33 and break 118.91. Points on the way up, 118.99, 119.05, 119.16, 119.28, 119.34, 119.39, 119.44, 119.60 and 119.75. Failure at 119.75 target at 119.44.

Shorts below 118.89, Target 118.59. Watch for reversal here to 118.89 and higher. Points on the way down, 118.85, 118.87, 118.84, 118.82, 118.79, 118.73,118.67 and Bottom 118.30. if bottom holds, long again to target 118.89.

Brian Twomey, Inside the Currency Market, btwomey.com

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