USD/JPY: Trying to form short-term base near 97.60
The market seems to be getting a bit bearish in the short-term on USD/JPY and it may be ripe for a bit of a squeeze? Overall I still prefer the sell-rally strategy but there is technical support at 97.60 (see chart) which has held firm on 3 separate occasions. There is certainly strong risk-reward case for buying dips to 97.70/75 with stops below 97.50, looking for a short-covering rally towards 99.00?
On the crosses, AUD/JPY is of course nearing strong technical support starting at 89.50 and EUR/JPY is also stalling near shorter-term Fibo levels (see chart). Both of these will give the bulls added reason to try picking a base in USD/JPY.
Medium-term bears should be patient and sit back and wait for some ‘silly’ spikes back towards 99.50.