Dollar vs. Yen Chart 4 Dec 2009

The dollar yen chart reacted in typical fashion last week as the Bank of Japan interevened in the currency markets once again, once the currency approached and then touched the 85 trigger resulting in the BOJ taking some positive action.  To regular currency traders such as myself, intervention has been on the cards and came as the dollar yen touched a fourteen year low.  Last week’s action was signalled by the Minister of National Strategy, Naoto Kan, who said that “the BOJ and and Government would act together to deal with the rising yen, and that they would consider all options on what action to take”.  It was clear from last week’s price action that they have already moved to prevent any further strengthening of the Japanese yen, with dramatic results!!  The fear, of course, from the authorities is that a strong yen will will once again hurt their export market and plunge the country back into a fresh period of deflation, from which it has only just emerged. From a speculator’s perspective the move was widely expected (myself included) which only added to the upwards momentum when intervention duly arrived, and help to power the currency pair back into safer waters as far as the BOJ are concerned, breaking well above all three moving averages and clearing the 90 price handle to boot! All in all, a good week’s work for the Bank of Japan which will now sit back and wait to see whether their intervention has provided sufficient momentum for the currency pair to continue higher this week and break through the strong level of potential resistance now in place in the 89 to 92 price region, with a move through here signalling a strong move higher in the medium term – perhaps aided even further by the BOJ.

The only items of fundamental news for this pair are in the US with a speech from Ben Bernanke and the Consumer Credit data – both of which are covered on the main eurodollar site.

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Support & Resistance for Dollar Yen :

S1:  88.75    R1:  91.53

S2:  86.98    R2:  92.54

S3:  85.97   R3:  94.31

Dollar vs. Yen Chart 26 Nov 2009

The dollar yen chart is now at 14 year low as traders & investors piled into the Yen on a tumultous day on the currency markets.   The dramatic rise in the Yen has prompted Hirohisa Fujii, Japan’s finance minister,  to say that ” he was watching forex market moves very closely and that the country could take appropriate steps if moves were ”abnormal”, – these comments have helped to pare some of the yen’s gains but with 87 price handle having broken then 85 could beckon (BOJ notwithstanding).

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Support & Resistance for the Dollar Yen Chart :

S1:  86.87   R1:  88.22

S2:  86.40   R2:  89.10

S3:  85.52    R3:  89.57

Dollar vs Yen Chart 23 Nov 2009

Another day of indecision and uncertainty on the dollar yen chart, which ended the trading session with a repeat of Friday as a smalldoji cross candle, as the currency pair trade in a very tight range. As outlined in last week’s currency market commentary for this pair, the 88usd to yen price level is key to the short term direction for the dollar yen, as it is at this level that we saw some intervention from the Bank of Japan last time around, a pattern we may see repeated as the yen continues to strengthen against the US dollar. As always the number one priority for the BOJ  is the Japanese  export market, and should it perceive that the downwards trend for the pair is likely to damage any recovery from the recent recession, then it will step in and take action to support the Japanese yen. With all three moving averages now weighing heavily on the pair the bearish sentiment remains firmly in place for the time being, and therefore any further downwards momentum is likely to trigger the BOJ into action so we can expect to see a bounce once again in due course. Longer term of course any recovery in the pair will require considerable momentum to breach the deep and substantial resistance areas now sitting above, with the first of these being in the 91 to 92 price level.

Following yesterday’s national holiday in Japan this morning say the release of the BOJ November report in which the Bank expected the economy to pick up over the next few months but warned that it was still weak and fragile suggesting that it may slow down once the effect of the stimulus measures have run out when the new fiscal year starts in April.   Meanwhile in the US the markets will be considering the Preliminary GDP figures due for release at 14.30 GMT and later the CB ConsumerConfidence data which is forecast at 47.6, slightly down from previous.

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Support & Resistance for the Dollar Yen Chart :

S1:  89.27   R1:  89.88

S2:  88.62   R2:  89.84

S3:  88.66   R3:  90.49

Dollar vs Yen Chart 23 Nov 2009

Technically we are once again approaching that dangerous level on the dollar yen chart as the price action moves towards the 88.00 price point , which triggered the previous intervention from the Bank of Japan to prevent the Japanese yen strengthening further thereby damaging its otherwise fragile economy and jeopardizing any recovery from the deep recession of the last few months.  Whilst many commentators have suggested that 85 is the pain threshold for the BOJ, my own view is that the 88 level is more likely, and as a result we may see a bounce higher from this point once again in the short term. With all three moving averages now weighing heavily on the dollar yen pair, the current sentiment is heavily bearish, increasing the likelihood of some form of intervention from the BOJ, and as a result we could see a sharp move higher in due course, possibly to retest the earlier level of 92.50 in the medium term as a result.

With a national holiday in Japan the market will be looking at the US Existing Home Sales which are expected to come in 5.71m.

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help you with your forex trading – so good luck and good trading.

Dollar vs. Yen Chart 11 Nov 2009

The yen to dollar pair continues to grind lower as we now begin to approach the 88.50 price level where the previous move found some support for a bounce higher, and it would come as no surprise, given the Bank of Japans interventionist approach to its currency, to see the same price action occur once again in due course. Indeed yesterday’s candle which closed as a small hammer on the daily chart suggests that we may see a small bounce in the next few days, with the low of the day finding a potential platform from the support area immediately below. However, with all three moving averages pressing heavily downwards on the daily chart this is far from certain, and only a break and hold above these technical indicators, coupled with a breach of the $92 price level will confirm this analysis. We could also be seeing the start of a double bottom formation on the daily chart – far too early to confirm this at present, but nevertheless and interesting pattern which could be developing and which would signal a strong move higher in due course.

The only item of fundamental news to come out of Japan’s was producer prices which came in at -6.7% against a forecast of -6.0% and falling again for the 10th month in a row.  Meanwhile in the US the unemployment claims are due along with crude oil inventories.  In addition there is a press conference from Treasury Sec Geithner while on a visit to Singapore.

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Support & Resistance for Dollar Yen:

S1:  89.45   R1:  90.21

S2:  89.01   R2:  90.49

S3:  88.73   R3:  90.95