Profit taking sellers have entered the market for USDJPY after the Japanese currency reached JPY 109.46; a six year low. Steve Lucas from 3c Analysis agrees with this call to sell the currency pair as weakness for USD sets in.
Japan’s Prime Minister Shinzo Abe expressed concerns about the relative weakness of the Yen after the currency hit a six year low against the dollar. Investors viewed Abe’s statements as a vote of confidence in the Japanese economy and the Yen gained 0.3 percent on the day. The dollar has been exhibiting strong gains as the Federal Reserve considers increasing interest rates. Steve points out that there are some bearish signs for USD at the moment. With US interest rate futures rallying and divergence on the Dollar Index he says these are signs of bearish momentum.
Expecting a move lower, Steve is looking to sell at the market open and again at JPY 108.86. He is targeting a drop to JPY 107.82 and JPY 107.09, which is the 17th of September’s base.
