Dollar Yen Weekly Candle Chart - 2nd February 2009

Dollar Yen Weekly Candle Chart - 2nd February 2009

Last week’s candle was an up bar, but unfortunately one that tells us little about the future direction for the yen dollar pair, other than we can probably expect more sideways movement this week as it hovers between 88.00 and 91.00. As I mentioned in one of my reports last week, we do have the potential for a double bottom, and for this to be confirmed I would expect the yen dollar pair to move towards 85.00, at which point the Bank of Japan may be forced to intervene, as the Japanese Yen is extremely strong against a raft of other currencies. Should this happen then I should expect to see the pair bounce back to 94.00, breaking through the current resistance with a possible move higher up to 98.00 where further strong resistance awaits. My suggestion at the moment is to wait on the sidelines and watch for a confirming move or signal, which when it comes will probably be strong and accompanied with volatility. The moving averages are all pointing downwards adding to the bearish tone with a failed attempt to cross the 9 average last week. My suggestion is to stay on the sidelines for the time being for a longer term trade, and only trade intra day or scalp if you see a very clear trading signal.