Richard Perry
Independent Analyst
USD/JPY
After weeks of doing very little aside from a mild downside bias within the multi-month trading range 106/109.85, we now see Dollar/Yen breaking sharply lower. The dollar weakness drove an intraday breach of 106.00 support on Friday. Although this move could not be held into the close, we see another decisive move lower early today. If we see a closing breach of this 106.00 support, it would be a really significant move to open old support around 105.00, but the next real support could not be until 101.20, the spike March low. Momentum indicators are going with this move, with a notable breakdown on daily RSI to the low 30s which is still not excessive (the March low saw 19 on RSI). This move means that all the old support between 106.00/106.60 (and towards 107.00 area) now becomes a source of old stale bulls and overhead supply. Near term rallies have to be therefore seen as a chance to sell now.
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