The Forex Pattern Price Time Report - USD JPY - Evening Session

The U.S. Dollar is beginning to show signs of being overbought after a strong rally against all the major currencies.  This signal is more technically based as there were no major changes in the long term fundamentals.  Some traders used the $1.5 billion write-off by J.P. Morgan as an excuse to shore up profits.  Other cited fear that the conflict between Russia and Georgia would escalate overnight.  Most, however, felt that the move had just overextended itself.

Today traders will continue to focus on the conflict between Russia and Georgia along with key U.S. economic reports.  On Wednesday, the U.S. government reports July Retail Sales and the Consumer Price Index.  The Retail Sales Report is expected to show a decline for the first time in five months.  This will signal that U.S. consumers have cut back on spending after using up their economic stimulus checks.  The CPI Report should reflect the higher energy prices during the first half of July and show an increase.  

Traders will also be watching the stock market as both of these reports as well an individual stock reports should influence the Dollar today.  Wednesday will also be the first day in several weeks that short selling restrictions by the SEC will be lifted.  It could prove interesting as it comes two days after J.P. Morgan announced another write-off.  This news made traders once again think about the stability of the U.S. financial markets.  

The USD JPY is showing signs of a short-term top as this pair broke below a key 50% price level at 109.94.  This sets up a possible break to support at 108.84.  This pair may feel pressure from a weaker stock market especially if the Retail Sales Report comes out lower than expected.  Furthermore, the lifting of short selling restrictions may lead to a hard break.  Finally, poor earnings reports from retail stocks may encourage investors to sell stock and pay back their borrowed Yen.


PATTERN

Main Trend:  Up  
Main Trend Top:  110.39 (08-11-08)
Main Trend Bottom:  103.76 (07-16-08)

PRICE

114.66        Main Trend Top (12-27-07)
113.28        .618 Retracement
111.92        2008 High
110.54        Weekly Gann Angle Down
110.39        Closing Price Reversal Top (08-11-08)
109.94        50% Retracement
109.27        Gann Angle Up

109.26          New York Close

108.83        50% Retracement
108.76        Gann Angle Up
108.46        .618 Retracement
107.76        Weekly Gann Angle Up
107.27        Main Trend Bottom (08-01-08)

TIME

Aug 12        90-Day Cycle
Aug 14        90-Day Cycle/180-Day Cycle