USD vs Yen - Daily FX Chart 8th May 2009

USD vs Yen - Daily FX Chart 8th May 2009

The daily chart for the dollar yen pair is possibly now creating a tentative head and shoulders pattern which could materialize into a fall in prices in due course to create the complete pattern.  Yesterday’s daily candle was once again indecisive with a failed attempt to move higher but closing up on the day with a deep upper shadow.  The three moving averages continue to intertwine and consolidate around the 99 price point where the currency pair now seem to be firmly range bound.  For any sustained move we need to see a break above 101 for a move higher, or conversely a break below 94.50 for a move lower and if the head and shoulders pattern is confirmed then this may be ultimate direction in the short term for the pair.   The main item of fundamental news on the economic calendar for today is, of course, the Non Farm Payroll numbers which are expected to show a modest improvement and a slowing of the decline in the jobs market which could help to provide a boost to the US Dollar although with this particular pair this is not always the case as the Japanese Yen is considered a safe haven currency and the usd to yen therefore has a different market dynamic to other more traditional currency pairs.

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