Weekly Call - Upward trend in USDJPY

In agreement with my previous post 'JPY no longer safe', this week's price action of the USDJPY pair has proven very biddish. Of course, my call for the pair to stabilize at 94 might still be premature at this point when there are still uncertainties out there.

Here's a couple:

1. Automakers e.g. GM may request for more money from the US govt and disclose their plans to restructure and prove they can sustain as a going concern. A Reuters report even mentioned they might go down the road of filing for chp 11 to do that?!

2. Details of Geithner's Financial Stability Program does not seem to bring confidence back into stocks.

Bad worms from these areas may result in a knee-jerk buying of JPY, pushing down the USDJPY.

However, what we have seen is that momentum for USDJPY pair this week supports further upward movement.

According to the chart below, MACD's short dated line has stretched a little away from the long dated line and both lines have gone into territory.

A clear support line is seen, stretching back to 23 Jan 09 so we'll set our stop loss a little lower than the resistance line.

On a longer timescale in the weekly chart below, we can also see that the price has closed above the 20 months old resistance line this week.

Next Friday's closing will be critical as to whether the USDJPY can close above the support line for 3 weeks running to confirm the breakout.

With that, here's my call for this week:
Buy from 91 - 91.60
Take profit 93.5 - 94
Stop loss 90 (upward trend support line since 23 Jan 09)
Spot price 91.93