Yen to Dollar - Daily Candle Chart 11th February 2009

Yen to Dollar - Daily Candle Chart 11th February 2009

Following my analysis yesterday of the ‘dark cloud over’ candle, indicating the beginning of a bearish move, this was indeed confirmed yesterday with a wide spread down bar candle, so it seems that the breakout of last week was a false move in the dollar yen pair. Hopefully you followed my advice of yesterday with small short positions, and following our confirming candle I would suggest that the same advice applies today, so small short positions again. Clearly the yen to dollar pair are not ready to reverse just yet, and if we see a wide spread down bar today, then we will be back into the consolidation area of the last few weeks, which will make trading the currency very difficult once again, and indeed we may see yet more sideways movement! The only word of caution I have is this – should we see 100 pipsĀ  or more today, then this could trigger a bounce as the support level comes into play, so if you do have an open position at this stage I would suggest taking any profits off the table.

There is a raft of information on the fundamental front this afternoon, but mainly in speeches from FOMC members, and you can find more details over in the euro to dollar site. Please note it is a Bank Holiday in Japan today.

The short term outlook is bearish, the medium and long term is sideways.