Yen To Dollar - 4th March 2009 Daily Candle Chart

Yen To Dollar - 4th March 2009 Daily Candle Chart

If you are following me on this trade, then I would suggest you move your stop loss higher ( if you haven’t already), following yesterday’s wide spread up candle, which has followed through in this mornings trading here in London. As I mentioned in yesterday’s post, we could see the $100 region broken in the next few days, and from this mornings price action, we could see this breached today. With all the moving averages providing good support, strong momentum in the move, and a breakout through the resistance area, this seems an excellent opportunity to open new long positions, with a stop loss below the $97 region, in case of any short term reversal later in the day.

The main fundamental news out later is in the US, with the release of the ADP figures, which can often provide an excellent guide to the NFP figures announced two days later. Although a relatively new piece of economic news, ( it was only introduced in 2006) over the past two to three years it has proved to be an extremely accurate early indicator for the figures on Friday. The other main economic news is the ISM index for Non Manufacturing, again an important set of numbers, which indicate whether the economy is in expansion or contraction and is based on a survey of purchasing managers. A figure above 50 indicates the economy is growing, and below that it is shrinking, with a forecast for today of 41.2 which is slightly worse than last time.Throughout the remainder of the day there are a series of secondary news items, all of which are covered in the economic calendar, including speeches by Treasury Secretary Geithner and FOMC member Lockhart, along with the crude oil inventories and beige book. The inventory numbers always have more of an effect on the Canadian dollar, rather than the US dollar.

The only fundamental news out in Japan for today comes this evening with the Capital Spending figures released by the Ministry of Finance, and which measure the change in the total value of new capital expenditures made by businesses. If the actual is better than forecast then this is generally good for the home currency, in this case the Japanese Yen, and is generally considered to be a leading indicator of the economic state of the country.

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