Forex: Yen reversal signals deeper retracement to 86.46 then 85.80 - Greg McKenna
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USD/JPY
FXstreet.com (Barcelona) - Despite Japanese Finance Minister Aso's comments that Japan will start to accumulate ESM bonds with its reserves, the Yen has been able to strengthen to end the American session at day highs.
While the news were initially welcomed by Yen bears, the fall was short-lived and as Global FX founder Greg McKenna notes, "when a trend is strong comments and data that supports it reinforces or is supposed to reinforce that trend..." but that was not the case, and "the reversal of the Yen signals the market most likely needs a consolidation to digest recent gains" he adds.
As a reminder, Greg's views are that if USDJPY gives up support through 87.115 - which it did - "we would have confirmation of a high and deeper retracement to 86.46 then 85.80." Greg is now projecting further depression in the USDJPY for the time being.
While the news were initially welcomed by Yen bears, the fall was short-lived and as Global FX founder Greg McKenna notes, "when a trend is strong comments and data that supports it reinforces or is supposed to reinforce that trend..." but that was not the case, and "the reversal of the Yen signals the market most likely needs a consolidation to digest recent gains" he adds.
As a reminder, Greg's views are that if USDJPY gives up support through 87.115 - which it did - "we would have confirmation of a high and deeper retracement to 86.46 then 85.80." Greg is now projecting further depression in the USDJPY for the time being.
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