USDJPY perfect neckline test for further downside

The USDJPY made a perfect bounce and test of the neckline at 96.50, an excellent entry for shorts looking to cash in on the large head and shoulders pattern on the daily chart.   Price is currently testing an important support at 94.50, historically an important level.  Beyond that, 93.60 and 92.40 are the next supports to target before the final target at 89.50.  Meanwhile price also still remains in the newly formed down channel, and if price continues downward inside this channel it will take all summer to reach the final target.  Of course, with the US dollar in such bearish sentiment currently,  it is likely that the USDJPY will break down through the lower channel line more quickly.  All eyes are definitely watching the action on the dollar, many economists and the like have been waiting for dollar weakness to kick in in a big way ever since the US government’s stimulus actions, bank bailout, and essentially dollar printing should impact dollar based currencies profoundly.  Today’s release of the FOMC minutes from last month’s meeting again prompted more dollar selling when the news showed the Fed is not against additional buying up of treasuries, a sure-fire way to kill the currency.  Best bet for us currency traders:  sell the dollar, sell the dollar big.  Good trading.