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USD JPY Confirms Weekly Reversal Bottom

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Nov 13, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    This week the USD JPY confirmed last week’s closing price reversal bottom with a follow-through rally to the upside. The primary catalyst behind the Dollar/Yen rally was the interest rate differential. Treasury Bond yields rose this past week while Japanese rates held steady. The increased spread helped draw investors into the Dollar. Compounding this incident was a hard sell-off in equities and the shedding of risky assets.

    Technically, the weekly main trend remains down, but the confirmation of the closing price reversal bottom is a sign of higher markets to follow. Often this pattern leads to the start of a 2 to 3 week rally equal to 50% of the last major range. Based on the range of 94.98 to 80.24, the potential upside target is 87.61 to 89.35.

    Contributing to this week’s bullishness was a breakout above a downtrending Gann angle at 80.98 this week. The next downtrending Gann angle is 87.98. This coupled with the Gann angle creates a resistance cluster at 87.61 to 87.98. The recent steep downtrend has created a major whole in the weekly chart which indicates this market has plenty of room to the upside.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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