USD/JPY Reaches Under 85.00; Buy at 85.15

November 27, 2009 - 9:55 am by Juan P. Bejarano · 7451Leave a Comment2009-11-27+14%3A55%3A27Juan+P.+Bejarano

The Japanese Yen was the currency of choice amongst investors as they seek safe haven from debt worries.

The Yen gained sharply across the board as news that Dubai attempts to reschedule its debt payments dampened demand for higher-yielding assets.

However, the Dollar bounced strongly from just under the 85.00 level as intervention fears emerged. A retest of this low is expected before higher prices follow.

USD/JPY, fell below the 85.00 level to reach an intraday low at 84.82. The pair has since rebound over 200 points to a current 86.90 high.

Although prices may head lower from here, investors will be cautions below 85.00 as intervention fears will continue.

The Japanese government has become more outspoken against further Yen strength, stoking speculation of market intervention if moves become one sided.

Some currency traders still look for a decline towards the 80.00 level as a point where the Government would have no choice but to intervene in the markets.

From current levels 86.90, the pair finds resistance at 87.15 (previous 2009 low support turned resistance) followed by 88.37 and 88.83.

With further downward pressure, the pair finds initial support from current levels at 85.71.

Following this level, USD/JPY will encounter support at 85.08 and 84.82.

TREND

Near Term: Neutral
Medium Term: Bearish
Long Term: Neutral

Trading levels in play:

Limit Buy @ 85.15 Targets: T1 85.65 – T2 91.30 Risk: 84.70
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Will follow up with comments if outlook changes.