By Russell Glaser
The strengthening of the yen could prove to be only a knee jerk reaction to the downgrade of the Japanese nuclear plant that was damaged in the earthquake. This could bring an opportunity to enter long in the USD/JPY.
Traders may look to enter long on the USD/JPY near the 84 level with a stop below 83.50, a level that the pair failed to break below yesterday despite multiple attempts. An initial target should be the recent high at 85.50. This allows for a nice profit to risk ratio of 3:1.
On an extension, the pair would target the September intervention high at 85.90, followed by 88.00.
To the downside, multiple supports are found in the near term. 83.30 is an apparent support and the falling channel line off of the September high may also come into play, as could the 200-day moving average at 82.80. Traders can move their stop lower for the trade but would need to raise the take profit level to keep a preferred profit to risk ratio.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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