Things should start to look a lot worse for the USD/JPY if the 98.30 level gives way and it should at least see us trade at 97.00 with a move all the way back to the late Jan 09 low around the 94.00 region not out of the question. You will notice on the daily chart that not only are these supports prior lows (which is often where you will find the big orders waiting) but they are also pretty close to where the 100 and 50 DMAs can be found. Expect any bounces to initially find the 99.30 level tough going.
On the daily we appear to have worked off the overbought nature of the technical studies but if you take a look at the weekly chart, you will see that things look a little less promising as far as the tech studies go. They have all turned down from overbought levels now and this could indicate a significant move lower for the USD/JPY.
Leave stops on shorts above the 100.80 level for now and we will look to lower these once we are trading a little closer to the 97.00 level. Look to add to shorts on bounces back to 99.80 and 100.50 with stops above 100.80.
