Forex: USD/JPY faces 90.80 trendline; sequence of lower lows at risk
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USD/JPY
FXstreet.com (Barcelona) - USDJPY heads into the Tokyo session well bid after finding some decent buying interest through London hours, which permitted the pair to set an intraday low at 90.33 before initiating a recovery towards 90.80.
The move off 91.18 high came through a non-volatile channel with a nice equilibrium of order flow between buyers and sellers, suggesting all we are seeing is a mere technical correction from overbought readings.
It is also worth observing, from an hourly perspective, how each bounce off lows led to a new lower low being formed, yet on the last attempt to break 90.33 late in NY trading, buyers emerged to now threaten a descending trendline coming from 91.18. A break above the 90.80, where the line crosses, suggests trouble for sellers for a retest of round 91.00 ahead of 91.18.
Giving his personal view, Sean Lee, founder at FXWW, notes: "USDJPY is making itself comfortable back above 90.00 and this will be encouraging to the bulls in the market, of whom there are a lot. None of the main crosses are showing any strong signs of topping formations, so sticking with the sell-Yen-rally strategy makes the most sense. Personally I still feel that the market is 'too short too soon' on the Yen but we contrarians need to show some patience."
The move off 91.18 high came through a non-volatile channel with a nice equilibrium of order flow between buyers and sellers, suggesting all we are seeing is a mere technical correction from overbought readings.
It is also worth observing, from an hourly perspective, how each bounce off lows led to a new lower low being formed, yet on the last attempt to break 90.33 late in NY trading, buyers emerged to now threaten a descending trendline coming from 91.18. A break above the 90.80, where the line crosses, suggests trouble for sellers for a retest of round 91.00 ahead of 91.18.
Giving his personal view, Sean Lee, founder at FXWW, notes: "USDJPY is making itself comfortable back above 90.00 and this will be encouraging to the bulls in the market, of whom there are a lot. None of the main crosses are showing any strong signs of topping formations, so sticking with the sell-Yen-rally strategy makes the most sense. Personally I still feel that the market is 'too short too soon' on the Yen but we contrarians need to show some patience."
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