Yen Dollar Daily Chart - Spot FX 12th May 2009

Yen Dollar Daily Chart - Spot FX 12th May 2009

With a classic “head and shoulders” pattern now forming in the daily chart for the dollar yen we now need to wait to see if the current downwards price action, as seen in yesterday’s wide spread down bar, continues, and in particular whether the price breaks below the neckline currently sitting at around the 95.70 region.  Yesterday’s candle closed below all three moving averages but as I have mentioned before given that these are tightly converged their significance is consequently reduced a reliable trading signal.

Items of fundamental news on the economic calendar all relate to the US dollar where the Trade Balance have been released to show a better than expected figure at -27.6bn against a forecast of -29.2bn and for a market view of the extent of current dollar weakness the dollar index too is showing a very bearish picture.

My trading suggestion for today is to wait for the price to break below the neckline of the head and shoulders pattern and then to look for medium term short positions on the downwards trend.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.