Fundamental Bears Before Technical Bulls | $USD $JPY #BOJ #Forex

FX:USDJPY   U.S. Dollar / Japanese Yen

As the stock market is turning increasingly wary and talk of a market crash abound, other risk aversion behaviors have transpired through Forex pairs. Here, in particular, USDJPY             fell significantly, keeping lower supports exposed.


Predictive analysis and forecasting system remains bearish in the short-tern, but bullish to neutral in the longer-term, suggesting a nearing of support. Defined ranges are:

1 - 101.198, high-probability hit
2 - 101.010, moderate probability hit
3 - 100.816, low-probability hit.


A separate proprietary pattern has defined support at 100.944, thus concentrating a PRZ in the lower end of the predictive analysis and forecast.


A lower drift in the pair without BOJ intervention is foreseeable for the time being, as Kuroda has opted for a watchful stance with no rate change for the time being. The historical tax hike impact on consumer behavior will require time to absorb the data, which is expected to be bearish . However, fundamental opinion is that a Japanese intervention in rate or bond purchase action won't happen until a critical mass of fundamental data justify it - Here is a good read on this from Mr. Ashraf Laidi:
- http://www.cityindex.co.uk/market-analysis/market-news/27360242014/g20-statements-jpy-gbp/

Weighed against a slow improvement in US economic data, the net outcome is expected to be supportive of a rally.


For the time being, my predictive analysis/forecasting system calls for further downside, defined at a shallow distance from Friday's close. Fundamental data lends support to a rallying over the next several weeks, based on a relative improvement in the US employment, as well as a probable intervention of sort from BOJ, as the historical tax hike is likely to further deteriorate the consumer side, while the Japanese economy might turn to export facilitation through an easing intervention that would turn its currency value more palatable to foreign consumers.

One might also consider a prior discussion on reflexive support of the USD, as China's Yuan continues to fall, pressing other export-dependent competitors to adjust their currencies downwards as well. But this currency down-push can only occur by reflexively up-pulling the Dollar lever. Or is there another liquid reserve currency available?

- Answer is: No.


David Alcindor
Predictive Analysis and Forecasting

Get my signals, analyses and forecasts on Twitter:
(Alias: @4xForecaster)

- All my comments are founded on unshared proprietary as well as common knowledge of technical analysis: Do your own due diligence before trading any market/asset. Additionally, my signals, forecasts, analyses and directional opinions are for educational purposes only and are not trading recommendations. Again, do your own due diligence first, then seek financial advice from a licensed professional, and only then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
David Alcindor
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