Dollar Yen Weekly Candle Chart - 23rd February 2009

Dollar Yen Weekly Candle Chart - 23rd February 2009

Last weeks wide spread up candle, suggests that the uptrend is likely to continue this week, following the breakout from the sideways price action of the last few weeks, with prices now above both the 9 week and 14 week moving average. There is little resistance directly ahead on the weekly chart, so there is nothing to suggest that prices will not continue their upwards move for the short to medium term, and my initial price target for the move is around the 95.50 region initially. If prices reach this area then we could see a move back to $98 and above. The last 9 weeks have provided a solid support for a move higher which provides us with some protection in the event of any reversal, and stop losses should be placed below this area for the time being, and only moved above when we reach the $95 region and above to lock in profits.

The fundamental news out this week in Japan is all very limited in the impact they have on the markets, starting this evening with the Monetary Policy Meeting minutes which provide a detailed record of the BOJ Policy Board’s most recent meeting, offering  in-depth insights into the economic conditions that influenced their decision on where to set interest rates. At around the same time on Tuesday we have the Trade Balance figures which in essence are the difference in value between imported and exported goods during the reported month. This is the seasonally adjusted data , not to be confused with the non-seasonally adjusted number reported by some news agencies. A positive number indicates that more goods were exported than imported and the forecast is for -0.49 against a previous of -0.15. If the actual is better than forecast, then this is generally good for the home currency, in this case the Japanese Yen.

Thursday sees a whole raft of numbers being released including Manufacturing PMI, Household Spending, Tokyo Core CPI, National Core CPI, Unemployment Rate and Preliminary Industrial Production. All of these will have some effect, but are not considered major indicators although last time round we saw the Tokyo Core CPI move the market significantly.More details can be found on the economic calendar for the week, and the US dollar fundmanetals are covered on the euro to dollar site for you.

My suggested trades for the short to medium term is for long positions with a stop loss below the previous support level at $88 with a view to moving this up to lock in profits in the medium term.