Reason:

If we consider USDJPY as a proxy for the Yen we can see in the daily chart below that it is highly probable that from the January 2 high price should unfold a Zig Zag down. The rebound from the February 4 lod is clearly corrective (Maybe it could be forming a Bearish Flag) fulfilling the proper structure of  a countertrend wave (B).

We can locate the potential target for the assumed wave (B) in the range 103 – 103.64 although probably it should stall at the 50 dma which stands at 103.50.

The Bollinger bands are tightening suggesting that a large move is coming.

USDJPY DAILY

If USDJPY has a pending wave (C) down FXY should do the opposite with a wave (C) up, hence I am watching if with a falling wedge price completes the wave (B) which would open the door to the kickoff of the assumed wave (C) up with a theoretical target in the area of 99:

FXY DAILY

 

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