No change for yesterday’s outlook, after the Yen’s strength penetrated the lows of last December & January, we were left with no notable support protecting the 15-year low which was reached last November at 84.81! We will not be a bit surprised if this pair started to move in that direction, and tried to break that low! On the contrary, we have been expecting this for weeks now, and it was included in our reports several times. But, signs show that the possibility of a rising correction to correct the fall from Wednesday’s top 89.09 to Friday’s low 86.25 is growing.

On the top of these signs: the inverted hammer formation, which appeared on the daily chart, and the completed 5-wave move (please refer to the attached chart). Therefore, and even though we are negative about this pair on the medium term, we should not neglect these signs which force themselves upon us for today! Short term support is at 86.25, and if broken, the price will continue searching for new lows, targeting 85.84, then the 15-year low 84.81. Resistance is at 86.95. A break here indicates that the odds of correction the whole 5 waves down from 92.87 are becoming massive. This will target 88.01 which could prove troublesome first, then 88.78. It is worth mentioning that breaking 86.25 even with a few pips will leave the odds of a rising correction dramatically lower than they are now.

Support:

• 86.25: Friday’s low.

• 85.84: Nov 30th low.

• 84.81: Now 27th low, and the lowest level since 1995!

Resistance:

• 86.95: the falling trend line from Tuesday’s top on the hourly chart.

• 88.01: short term Fibonacci 61.8% level.

• 88.78: Fibonacci 38.2% level for the whole drop from 92.87 (the 5 waves down).