Morgan Stanley has just issued a research note saying there are several reasons why they think the USD/YEN has already bottomed. They are recommending to buy the currency pair with a stop at 84.50 and they think we will see 101 over the next 12 months.
I think we will probably get much better levels to buy than the current 87.85 level. In most markets, we should look for at least two tests of the bottom before the bears give up. Thus, I urge investors to be cautious. In the short term, ie in the next 12 hours, if we get a move in the USD/YEN to 88.40 plus area, we should actually consider selling the currency. A close stop will be at 88.65, which you can lower to break even once you see a 50 point move in your favor. There is additional resistance at 88.90, but let us see what happens between 88.35 and 88.60 first.
