This weeks Trend:


View on USD/JPY: long-expected downward trend

Weeks forecast for USD/JPY

+2004 pips - this is the trades result for the last week of our Forex traders' signals.


The market keeps on bringing surprises. During the last week USD/JPY course came down with almost 300 pips: from the longstanding maximums in 122-shape area to the new correction minimums in 119-shape area. 119.90 top level of 2006 which classically came out as a support during the last three weeks turned out to be broken downward. Now deeper slide to 118.00 and possibly under may follow.

Last week our third script was fulfilled: (30%) - "a downward trend to 119.00". The yen rallied last week and USD/JPY course slid sharply from the up fluctuations margin of 122.00 to the upper one of 120.00. 119.90 level was broken down following which course slid sharply to the support line in 119.00-shape area. There is fair chance of the further USD/JPY course decline and achievement of 116.00-118.00 area during the next two or three weeks.

Script 1 (40%): Side exchange fluctuations within the 119.00 - 120.00 area.
The pair may make a new side fluctuations range 119.00-120.00, beside the reached and broken out margins. Slide or rise will lead at the least to 100 pips movement to a breakout side.

Script 2 (40%): A downward trend to 118.00.
The 119.00 support break down is necessary for this script. The nearest decline target is January minimum level of 118.00. This script may lead to a deeper decline to the 116.60 level area where May, 2006 minimum trend line is situated.

Script 3 (20%): An upward trend to 121.00.
A sharp break above of the 120-shape is necessary for this script. 121.00 level (the middle of the previous range of 120-122) may come out a resistance line and lead to rebound with the following decline and the second script fulfillment. We don't expect for rising above 121-122 as yet.

Resistances
119.90 - the broken out support of the last three weeks - the top of 2006.
121.00 - the estimated resistance of the middle of the previous channel 120-122.
122.20 - the January, 2007 maximum.
125.80 - the local 2002 year resistance in October and November.

Supports
119.00 - the last week support and the important supports lines region.
118.00 - the January, 2007 minimum.
116.60 - the May, 2006 support line region - yearly trend line. The broken out downward trend line from 1998 is in the same place.
114.50 - the local correction minimum of 2006 in December.

Good luck to all, Mike

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