Forex Daily Chart for Yen to Dollar 18 August 2009

Forex Technical Analysis

Today’s candle on the dollar to yen forex chart ended a typically choppy forex trading session with a narrow spread up bar with a deep upper shadow to the small body suggesting that we may well see a fall in the dollar yen tomorrow as a result.  This bearish technical picture is further confirmed, firstly by the fact that prices are now firmly below all three moving averages and, secondly that today’s price action failed to hold above either the 14 day or the 40 day moving average.  In addition the closing price is now firmly below the strong resistance in the 94.70 to 95.80 region which should provide a good barrier to any attempt to move higher and therefore my trading suggestion for tomorrow is to attempt small shorts on an intra day basis using tight stop losses to protect against any sudden reversals.  This forex pair is notoriously difficult to trade at present and therefore any opportunities should be seen as short term scalping only.

Fundamental Forex Analysis

There are only very minor items of forex fundamental news on the economic calendar for either currency which could lead to a degree of volatility as forex traders look for direction elsewhere and, in particular from the equity markets.  For Japan we have the All Industries Activity which measures the change in total value of goods and services purchased by business and this is expected to come in 0.4% against a previous of 0.7%.  Meanwhile in the US we only have the crude oil inventories which will probably come in relatively bearish and once again be ignored by the rest of the markets.

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.