Comment: Having spent the last three months trading above 79.00, after trading below here for four consecutive months (the midpoint of the large trading band established since November) prices look set to break lower, if not this week then by the end of July. The Ichimoku cloud lines suggest the Yen strengthens against the Canadian dollar – taking the cross lower. While we cannot rule out another initial corrective bounce from our pivotal 79.00, rallies are unlikely to move above 84.00 and certainly no higher than the 90.00 mark. Downside targets are 76.50 short term and probably all the way back to the multiple lows between 70.95 and 70.55 that limited the downturn between November 2008 and March 2009. Note that the area from 70.95 to 68.45 has stopped declines for all but five months in 1995.
Strategy: Sell at 79.50, adding to 84.00; stop above 86.00. Add to shorts a weekly close below 79.00 and again on a daily close below 78.00. Targets as above.
