After a shallow correction yesterday, USDJPY challenged last Friday’s high at approx 84.75 this morning on rumors of institutional buying out of London. USDJPY found support at the confluence of its daily central pivot and the 50% retracement level of the previous sessions range during the London session, before jumping higher just ahead of the opening bell of the U.S. stock market– see chart below.

After putting in a spike bottom in the 76 handle last month, the pair has rallied sharply on the first coordinated G-7 intervention in 10-years to weaken the yen, spurring talk of a potential long-term bottom, and a reversal of the previous 4-year bear market.

The bull market in AUSDUD found support just below last Friday’s low at approx 103.15. AUDUSD is another pair which has rallied sharply over the previous 2 weeks, and is so far showing little inclination to retrace that powerful move, having taken out the London session highs following this morning’s disappointing U.S. service sector PMI figure which came in 1.5% less than expected.   

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Jay Norris is host of The Daily Forex Report at Clovernest.com  and the author of  the soon to be released Mastering Trade Selection & Management, McGraw-Hill, 2011.

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