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Weak Stock Market May Trigger Correction in USD JPY to 108.57

ByThe Pattern, Price & Time Report
Published 08/06/2008, 08:00 PM
Updated 05/14/2017, 06:45 AM

Overnight, the USD JPY ignored the Japanese governments statement that the economy is "deteriortating" and decided instead to focus the weakness in the U.S. stock market.  

Japanese traders have been flooding the U.S. stock market in search of a better return, but indications are that this buying may dry up today as pre-market indications are for a lower opening.  

Some feel the rally in the stock market is a little overdone to the upside.  In addition, the rally this week has not really done any damage to the resistance.

Technically, the USD JPY neared a major 50% objective at 109.94.  There is usually a technical break on the first test of these levels. The market may be going through that correction at this time in an effort to attract new buyers on the break.

The short-term charts indicate the possibility of a correction to at least 108.57 before new buyers surface.  The key is to be patient and wait for a break before exploring the long side.


PATTERN

Main Trend:  Up  
Main Trend Top:  110.12 (01-09-08)
Main Trend Bottom:  107.27 (07-16-08)

PRICE

114.66        Main Trend Top (12-12-07)
111.92        2008 High
110.12        Main Trend Top (01-09-08)
109.94        50% Retracement
109.78           Overnight High

109.59          New York Close

109.32          Overnight Low
108.57        50% Retracement
107.76        Gann Angle Up
107.27        Minor Trend Bottom (08-01-08)

TIME

Aug 7           180-Day Cycle

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