Dollar-yen is another pair that may have trapped investors on the wrong side yesterday. Gap down opening in oil also saw USD/JPY drop in early Asia yesterday to 107.84 before the recovery set-in. The bird flew higher to near 109.40 levels today.
Trendsetter FX’s Wilson Leung gave thumbs up to yen bulls as he detailed weekly head and shoulders pattern and low probability of US rate hike next week as major reasons for a sustained weakness in USD/JPY pair.
Leung took note of March low of 110.67 as reversal point and said a break higher would signal dollar strength. Those stuck in shorts may be relieved to hear Leung present a downside medium term target of 106.50-106.00, which according to him is a head and shoulder breakout target as well.