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Both the USD JPY Monthly and Daily Charts are now clearly showing key reversal patterns with the daily chart poised to break the initial resistance at 92.08. A break of the 92.08 level looks up to 93.55 as next target.
On the monthly candlestick chart, the U.S. Dollar needs to close above 93.55 by the end of the month to confirm the reversal formed from October, 2008 to January 2009. As the confirmation candle, February needs to close above the 93.55 level which is the midpoint of December, 2008 candle which now serves as our reference point for this month's trading.
Over-all, the candlestick chart is showing market expectations for a dollar surge near term against the majors. With every one at G7 having crafted their respective economic stimulus packages, the market will be watching who can rev up their economy first. This will be a race to get out of recession with cards slightly favoring the U.S.
My demo trading update: I re-established a buy at 90.18 yesterday. Maintaining my stop at 88.50 with an immediate near term target to take profit at the failure of 92.08!
DAILY CANDLESTICK CHART SHOWING A REVERSAL
MONTHLY USDJPY CANDLESTICK CHART SHOWING REVERSAL
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