USD/JPY - Daily Candle Chart 20th March 2009

USD/JPY - Daily Candle Chart 20th March 2009

Yesterday’s wide spread down bar confirmed the bearish engulfing signal of Wednesday and temporarily pierced the 40 day moving average before closing marginally above on the day.  The tone of the yen to dollar pair is now heavily bearish and it is only a matter of time before we see a move to retest support first at the 93.25 level and if this is penetrated, as expected, we could see a move back down as far as 91.50 or even lower, next week.  The only caveat to this view would be an intervention by the Bank of Japan who have already signalled their intention to join in with the quantitative easing party.

Any up move in prices today should be seen as a selling opportunity and look for these on the hourly chart and sell anywhere above 95.45 with a stop loss above 97.23 (always try to avoid using round numbers for your stop losses). The only item of fundamental news out today which may impact on this pair is Ben Bernanke’s speech on the origin of the financial crisis and community banking.

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