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Yen Bear Continues, Defines New S-T Risk Level

Posted 05/15/2018 7:26AM CT | RJO Market Insights

Overnight’s break below 02-May’s 91.11 low reaffirms our major peak/reversal count introduced in 29-Mar’s Technical Webcast and leaves 04-May’s 92.29 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to even defer, let alone threaten the clear and present downtrend. Per such this 92.29 level is considered our new short-term risk parameter from which a still-advised bearish policy and exposure can be objectively rebased and managed.
Yen Jun '18 240min Chart
Yen Daily Chart
The daily chart above shows the developing POTENTIAL for a bullish divergence in the RSI measure of momentum, but only proof of strength above 04-May’s 92.29 corrective high will CONFIRM this indicator to the point of non-bearish action like short-covers. Until and unless such 92.29+ strength is proven, the trend is down on all practical scales and should not surprise by its continuance or acceleration.

From a longer-term perspective the weekly log active-continuation chart below shows the market “only” back to the middle of the past few years’ major lateral range between 79 and 101 where the odds of aimless whipsaw risk should be considered higher. This said however, the clear 3-wave and thus corrective recovery from Dec’16’s 84.27 low warns of a resumption of Jun-Dec’16’s trendy, impulsive plunge that preceded it. Combined with the recent return to relatively historically frothy bullish sentiment levels, this could mean sharp, sustained, extensive and even relentless losses to the sub-85 lower-quarter of the multi-year range in the months or even weeks immediately ahead.

These issues considered, a full and aggressive bearish policy remains advised with strength above at least 92.29 required to pare or neutralize bearish exposure commensurate with one’s personal risk profile. In lieu of such strength further and possibly protracted losses remain expected straight away.

Yen Weekly Chart

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