As expected, GBP and Eur did test the Diff R/L before coming off. Hence, we are right to stay off the market for a while.
Yen did break the Diff S/L (1.0555). Currently it is trading higher to “close the gap” and perhaps it may test the Diff S/L again. However, should it break OP again. More selling is likely to happen. After all, Fundmentally wise, USD seems to be strenghening which is reflected by the recent gains in the US market. Reports on talk of investment outflows from Japan while retreating against other risk-sensitive currencies may catalyse further gains on the dollar.
Once again, being a purely technical driven, price action dictates my course of action. If the news are “true”, Yen should weaken against the dollar by trading below its OP (1.0525).
Good Luck!
CK
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