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.