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Dollar Yen Intraday Dip Potential?

Last updated 3/19/2009 1:18 PM EST (GMT -5) 0 Comments - Add your comment

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FX360 Technical Analyst Staff

Technical Analyst, GFT

Huge swings (in this case government induced dollar negative swings) typically invalidate most geometric pattern based setups. This is mainly due to the inability to accurately gauge support until a top, or resistance until a bottom, has been established thus decreasing the ability to accurately measure risk. The good news is that after that top has been established we generally see an influx of pattern development. In a way this is much like a pebble being dropped into a pond. Once the impact is absorbed the resulting ripples are inevitable and can be measured and projected based on the mass of the pebble and the height at which it was dropped. Well the Fed dropped a pretty big pebble from really far away so it may take up to a couple days for that initial impact to be absorbed and for a top to be established.

That said, today's Foresight-A.I.™ time/trend forecast is suggesting a intraday low to potentially occur around 1:30pm EDT today opening the door for a final push lower to intraday support near 93.30, 92.50. Prices have steadily declined during the morning session most recently coming off a 50% retracement near 94.25. Assuming this top holds, a new intraday low below 93.50 could spark another sharp spike down to intraday support to around 92.50. With prices currently hovering around 94.0 this makes for a good risk/reward opportunity to the short side, again, assuming the most recent intraday top near 94.25 holds. If not, then we could see a more significant bullish correction as the USD/JPY is currently testing 50% daily support near 93.5.

2min Chart - Room down on today's time/trend forecast

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