Goldman's John Noyce is the first FX technician with a proposed take on tonight's stunning developments. Keep in mind, he, like everyone else is in uncharted (pardon the pun) territory.
Quick JPY Charts - Wednesday 16th March 2011
There are two ways of arriving at a downside target of 77.75-77.56;
- An equal size pip drop from the June ’07 high to that from the August ’98 high to the November ’99 low would target 77.75
- The extension target of the triangle which formed from 1st November ’11 to 15th March comes in at 77.56
The market has been below this region intraday, but, the NY 5pm close was at 77.90 according to the EBS data we use. If we were able to stabilise around 77.75-77.56 you could argue that the last part of the drop was set in an extreme situation with poor liquidity etc. definitely something to watch closely. Not to say the call was for a move this sharp in the first place, but with the help of hindsight on two counts you could argue “target met”.
..If.. the down move does continue the next really clean level is the actual parallel channel support off the August ’98 high which comes in at 71.70 on the linear scale chart.