Posted on Mar 02, 2023, 07:21 by Dave Toth

The 240-min chart below shows today’s break to yet another round of new lows for the major correction to Oct-Jan’s 66.23 – 79.19 rally introduced in 03-Feb’s Technical Webcast.  This continued weakness leaves smaller-degree corrective highs in its wake at 74.05 and 74.75 that are considered our new mini and short-term parameters from which the risk of a still-advised bearish policy and exposure can be objectively rebased and managed by short-term traders.

The daily (above) and weekly (below) charts show the increasingly entrenched rebuttal to Oct-Jan’s entire 66.23 – 79.19 rally that we believe is a B- or 2nd-Wave correction of that initial (A- or 1st-Wave) rally within a monstrous, multi-quarter BASE/reversal process into a new secular bull trend for the yen.  Coming on the heels of a long-term bear market in the yen that dates from at least Jan’21’s 97.55 high and possibly from 2011’s 132.64 high, this suspected B- or 2nd-Wave correction is expected to be “extensive” in terms of both price and time.  We’ve noted the 50% and 61.8% retraces of Oct-Jan’s rally at 72.71 and 71.18, respectively, but these derived levels are only considered guidelines or areas “of interest” around which to beware a relapse-countering bullish divergence in momentum.  They are NOT considered support.  Until/unless this market arrests the clear and present downtrend with a bullish divergence in momentum needed to reject/define a more reliable low and support from which non-bearish decisions can only then be objectively based and managed, further and possibly extensive losses remain expected.

These issues considered, a bearish policy and exposure remain advised with a recovery above 74.05 and/or 74.75 required for shorter-term traders to pare or neutralize bearish exposure and a recovery above at least 74.75 for longer-term institutional players to pare exposure to more conservative levels.  In lieu of such strength, further and possibly accelerated losses remain expected straight away.

RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.