Couple of days after the FED rate decision, the major support of USD-JPY is still holding. In fact, today this pair, and all other Yen crosses, rebounded quite a bit. It seems that the assault on new lows is over. For now, that is. One could argue that the USD-JPY broke the support, because the rate dipped to 84.72, about 10 pips lower that the low from last year. As suggested in The most watched Forex chart, for this level to be broken the market should close below it on at least daily chart. Anything less is simply testing it. And it seems, there were plenty of buy orders sitting there, enough to push the USD-JPY to above 86 as of this writing.

While the Yen pairs have found a bottom today, probably a temporary one, they fell sharply yesterday, following the FED announcement. Very nice moves, for those who happened to be on the right side of these moves. On these pages I focused on the JPY crosses with the commodity currencies. They were all sitting at supports identifiable on intermediate term charts, which for me are 4H charts. The NZD-JPY was the first one to drop, followed by the AUD-JPY few hours later.

It as sold at 61.95, with a target of 61.00. That is where another support, not visible on this chart was located. This pair went even lower a little later, but I was perfectly content with the result. Movement in the Kiwi-Yen proved to be a good guide for the AUD-JPY.

As mentioned in the brief update yesterday, this trade was closed before reaching the objective. Perhaps it was too big, but my main motivation was to get out of this market before the Australian employment data release. The profit was healthy, more than 100 pips, so I didn’t want to risk it, knowing how volatile and unpredictable these events have become recently. BTW, the report was a strange mix- it showed 23K new jobs created, yet the unemployment increased to 5.3%. Talk about confusing stats!

It took almost 2 weeks, but my short EUR-GBP trade finally came to a conclusion. Entry was at 0.8305, objective about 100 pips, the end result 94 pips gained. This position was closed at the same time as the Aussie-Yen trade. All said, it was a good day.

Today I was searching for more short trades in the JPY crosses, but there were few opportunities. The best set up came after the large bearish candle, which opened at around 77.00, but once it closed there was not much room to play with before the support. No trade here, but a few were taken in EUR-JPY using even shorter term chart. What is next? This rebound so far reached the 38% retracement of the down swing. I’d like to see it get a little higher, closer to 77.50 and then look for signs of reversal, for more short trades. It is possible that if the 100 SMA and 50% retracement fail to prove enough resistance, long entries might be better advise, but that will depend on how the price develops and where it forms minor highs and lows. Whatever happens, these trades will be closed before the weekend.

Mike K.