Yen to Dollar Daily Chart 19th May 2009

Yen to Dollar Daily Chart 19th May 2009

Yesterday’s short squeeze higher provided excellent opportunities for opening short positions in anticipation of a deeper move lower now that we have cleared the neckline of the head and shoulders pattern (BOJ nothwithstanding), and provided we do not see a move higher above the moving averages, then we should see the usd/yen pair move to our initial target of 94 in due course, followed by a move to re-test the support at 91.50.  Items of fundamental news on the economic calendar today kicked off with the revised industrial production figures for Japan which came in on target at 1.6% and later today we should have the preliminary GDP and GDP index figures for Japan, which are forecast to come in at -4.2% and 1.8% respectively.  The GDP figures will be particularly important as the market waits to see whether Japan has managed to stem the rate of decline or will the figures be more akin to the German figures which shocked the market.  Should these prove to be worse than expected this could deliver a dose of realism to the equity market and in turn see some strength to the Japanese Yen.  Meantime in America Building Permit and Housing Start figures are expected and again the market is looking to see whether the economy has reached a positive turning point.

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.