Dollar Yen - Daily Candlestick Chart 30th March 2009

Dollar Yen - Daily Candlestick Chart 30th March 2009

Friday’s down bar in the yen to dollar pair once again confirmed the strong resistance now built up just below the $99 region with yet another failure to breach this level adding to a long list in the last few weeks.  This region is now extremely strong from a technical perspective and was given added significance this morning by the wide spread down bar formed in early trading which has now penetrated both the 9 and 14 day moving averages.  In addition the tweezer tops of the last 2 weeks  (on the weekly candle chart) also contributed to the bearish picture now unfolding.

For any longer term bearing sentiment to continue we will need to see a break below the 40 day moving average followed by a breach of support in the 94.60 zone and thereafter the 93.70 area.  If both of these event occur then we could see a deeper move into the consolidation area of the 89.50 to 91.50 region as the Japanese Yen strengthens – something which the Bank of Japan would not welcome especially following even weaker than expected preliminary industrial production figures which came in last night at -9.4% against a forecast of -9.1%.

This week sees some very important fundamental news in the economic calendar relevant to both the US and Japan and in particular on Tuesday for the Japanese Yen we have the quarterly Tankan Survey which is a leading indicator which I will discuss in tomorrow’s commentary.  The remainder of the week is against the backdrop of the G20 summit in London, a raft of US fundamental data, topped off with the NFP on Friday and the closing of the Japanese year end this week.

My trading suggestion for today is to try and take advantage of the bearish momentum which is building by looking for trading opportunities in the shorter time frames, always remembering to sell into the market on any upbar (not a down bar) and to take profits off the table.

In the meantime you can keep up with all the latest live currency charts, latest currency news and fundamental news by clicking on the relevant links.