(99,70) The USD/YEN is almost at 100 and it is looking like it could go much higher in the coming weeks/ months. UBS is right by saying the dollar could go as high as 125; we even add it could go to 140 based on a possible Elliot wave projection. But before that, the possible scenery suggests also a return toward the 90 area. The indicators of the weekly chart are well overbought as never before in the last 40 years, but start also forming bearish divergences suggesting a change to positive tone. This, together with the fact that the indicators are well above 75% (therefore bullish range) is confirming that the dollar’s rally could not be over yet!! However, we have also negative reversals in the weekly as well as in the monthly charts supporting a correction!!! On top of that the DOLL/YEN already reached the 50% retracement level, 99,90, of the previous drop since June’s 2007 high at 124,15. We have a similar situation in February 1997; after a rally toward 127,50 where the weekly indicators started forming bearish divergences above 70% the dollar confirmed a correction to 110,60 before eventually resume the move up hitting 147,60 in August 1998!! Based on this consideration we expect a firm correction by the DOLL/YEN, move that we expect to be a buying opportunity but only at lower levels and probably close to the 90 level!!
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