Update for: 2010-08-16 - 2010-08-22

Posted on: Sunday, 15 August 2010 13:42

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USDJPY: 86.18

 Short-Term Trend:  downtrend

Outlook: In line with our expectations USDJPY made a new low last week just below the last year's low at 84.82. However, it then bounced back. Thus, though the trend on the daily chart remains on the downside (as evidenced by the declining 21-day moving average), a significant divergence has developed between the price and some daily indicators. That may mean that a larger rally back twd 87.40 (or higher) is under way.
From a trading standpoint, there is now a great chance that our stop at 86.50 will soon be hit. But we have already locked in a profit in our hypothetical trade, so there is nothing to worry about now. If stopped out, the market may not present a good trading opportunity in the next month or so.

Strategy: Holding short from 88.00 is favorable. Stop=86.50. Target=84.00

Next Update: Wed, 08/18/2010, 09:00 - 10:00 CET


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