US Dollar vs Japanese Yen - Daily Candle Chart 28th May 2009

US Dollar vs Japanese Yen - Daily Candle Chart 28th May 2009

With a raft of fundamental news on the economic calendar for the Japanese Yen today’s currency trading could be marked by extreme volatility and surprising moves which may conflict with the technical picture, particularly as several markets are closed for the Dragon Boat national holiday.  Tonight in the Asian trading session there are 6 pieces of important news which will certainly impact the yen to dollar pair starting with manufacturing PMI, closely followed by household spending, Tokyo Core CPI, National Core CPI, the unemployment rate and finally preliminary Industrial Production.  In the early hours of tomorrow’s London session we will also have housing starts due for release.   Of all the above the most important are the Tokyo Core CPI and Preliminary Industrial Production, and the first of these is forecast to come in -0.6% against a previous of 0%.  The data measures the change in the price of goods and services purchased by consumers in Tokyo but excludes fresh food items, and provides an early snapshot of consumer inflation or deflation.

The other key announcement are the Preliminary Industrial Production figures which measure the change in the total inflation adjusted value of output produced by manufacturers, mining activities and utility companies, and is generally considered a leading indicator of which the Preliminary is the first of two versions and hence the most eagerly awaited.

From a technical perspective the dollar yen pair is re-testing the neckline of the recent head and shoulders having broken above both the 9 and 14 day moving averages following the bullish reversal signal of Friday last week, and the key for the next few days will be whether this area provides a barrier to any move higher which seems likely at present.  As a result any reversal should be considered as an opportunity to open sell orders anywhere in the 96.80 region.

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.