The USDJPY is hanging in there still — surprising, given the abysmal durable goods print.  I wouldn’t expect the rising wedge to hold.

The e-minis shed a portion of the overnight ramp, but only to the purple .618 so far.

continued for members…

Here’s the chart I believe will rule the roost in the coming week or so.  USDJPY has backtested the broken SMA50 (purple), leaving a nice H&S neckline in its wake.  While the SMA100 (yellow) is certainly a potential target at the .500 Fib, the SMA200 (red) at the .618 has to be considered more compelling.

If the Fed stays the course on tapering, I fully expect these lower targets to be met — and then some.  The horrid durable goods number aside, most of the economic data has been slightly positive since the last FOMC meeting.

Going back and reading the last minutes, I’m struck by the negative tone.  Yet, they tapered anyway.  With no uptick in inflation, and a much lower unemployment percentage (thanks to the cessation of emergency benefits) the doves don’t really have much cover to pull an about face — unless they decide the EM situation warrants it.

Just spit-balling here, but by altering their taper plans to address the market instability, they would tacitly acknowledge just how tenuous it it.  We’ll know in about 24 hours.