The Yen gained against all of its counterparts yesterday with the USD/JPY finishing just below 97 at 96.98. The pair is inside a daily wedge or reducing triangle formation suggesting that there is a potential big move coming on one direction or another.
I am sure traders would love to think that it will be up and we will all be able to ride our long positions up to 105 finally, but I’m not convinced that will be the case just yet. Having closed below 97.00 with lows from April and August both acting as resistance now, it is highly probably that we will see the 96 level get taken out soon, and a run to 95.00 or lower is still in the cards.
The daily 200 Moving Average is currently at 94.60 and these moving averages can often act just like magnets on the charts. If we do continue lower, look for support at 96.50 (Monthly S1/Triangle bottom) and 96.00 (Weekly S2) before a combined Monthly S2/Weekly S3 are reached at 95.12. Above resistance is also frequent with the Weekly Pivot at 98.25 and Monthly Pivot/Triangle Top at 98.90.
