USDJPY: Triggers MT Weakness Off The 124.14 Level

Mohammed Isah from FXTechstrategy at 11/30/09

USDJPY: Triggers MT Weakness Off The 124.14 Level - With the pair’s continued weakness in the short term coming to ahead this week following a break and close below the 87.10 support zone

USDJPY: Triggers MT Weakness Off The 124.14 Level

USDJPY - With the pair’s continued weakness in the short term coming to ahead this week following a break and close below the 87.10 support zone, risk of further downside prices is now envisaged. USDJPY has been trapped in falling channels both on the daily and weekly time frames since tumbling off the 101.43 level in April’09 putting it in a bearish short term downtrend culminating in this week’s break of its important support zone located at the 87.10 level, its Dec’08 low/Jan’09 low(double pattern). That double pattern served as platform under which the pair rallied to a high of 101.43 in April’09. Despite its corrective recoveries to the 101.43 level and another earlier than that in Aug’08 at 110.67, its overall medium term downtrend activated off the 124.12 level in Jun’07 remains unbroken.
Having resumed that trend, the key levels we are watching now on the downside are the 8480 level, its Nov 26’09 low, the 84.45 level, its July’1995 low, the 81.77 level, representing its May’1995 low and then the 79.70 level, its April’05 low. However, we cannot rule out correction in the course its medium term downtrend resumption. Such corrective price activities if seen should shape towards the 87.10 zone, its former double bottom pattern swing lows invalidated on Nov 26’09.This zone is expected to reverse roles and provide support thereby turning the pair lower again. Further out, its Nov 04’09 high at 91.31 will be targeted on a loss of the latter with additional strength if it occurs aiming at the 92.31 level, its Oct 27’09 high. On the whole, with its medium term declines initiated from the 124.12 level activated, further downside prices are expected.