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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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

Dollar vs Yen Chart 28 Oct 2009

The three candle hanging man pattern was duly confirmed yesterday with the yen to dollar pair ending the trading session with a wide spread down candle, which closed marginally below all three moving averages, and suggesting that the recent rally may have come to a temporary halt. The technical picture however is far from clear for the yen to dollar pair, as we have several issues to consider on the daily chart. Firstly it could be argued that yesterday’s close actually found some support from the crossing of the 40 day and 14 day moving averages, and indeed this price level is also a minor support region adding some weight to this analysis. However this is counterbalanced by the bearish hanging man signal coupled with the failure to breach the 92.50 resistance level which halted the recent rally. In addition, and longer term, we could construct a trending channel with lower highs and lower lows which would suggest that the bearish tone ( longer term ) remains firmly in place, but against this technical analysis we do, of course, have to bear in mind the Bank of Japan who will always step into the market to protect theYen should they feel this is in the interest of the Japanese economy. The recent low at 88.50 was a case in point, with some anlaysts suggesting that 85 would be the trigger point, but on this occassion they seem to have entered the market sooner rather than later. So in summary a mixed picture for the yen to dollar and one that is far from clear. Should the downwards pressure continue today then we could see retest of the 88.50 level in due course, and possibly a bounce back from here once again.

R1:  91.37   S1: 90.20

R2: 92.13    S2: 89.79

R3: 92.54    S3: 89.03

Items of fundamental news for the Japanese Yen came overnight with the Preliminary Industrial Production numbers which came in better than forecast at 1.4% and the CSPI (Corporate Services Price Index) which too came in better than expected at -3.2%.  All the news items for the US are covered in the main eurodollar site. You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Daily Dollar vs Yen Chart 23 Oct 2009

The yen to dollar pair continued the recent strong rally once again on Friday, ending the trading session with another wide spread up candle, adding to that of Thursday, and more importantly breaking above the minor resistance level in the 91.50 price region, suggesting that this trend has some way to go. This view is also confirmed by the 9 day and 14 day moving averages which are all pointing sharply higher, and with the 40 day now crossing the latter of these, this is adding to the bullish picture. Whilst this recovery will no doubt be welomed by the Bank of Japan, for any sustained longer term move, we will need to see the deep resistance now ahead breached once again, and which may prove to be a more difficult obstacle to overcome. The weekly chart for the yen to dollar is also revealing as it suggests that we may be witnessing a double bottom forming, with the floor in the $88 region, but for this to be confirmed we have some way to go, with a break above the 100 being the first signal that this has indeed occurred. Whilst this is well above the current price level, it will be an interesting technical development to watch over the next few weeks, and if confirmed, could see the currency pair surge higher back towarsd the 110 price handle in due course.

With no items of fundamental news for either Japan or the US markets will be taking their cue from unexpected, breaking news or simply drift.  You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.