USD vs Yen - Daily Candle Chart 20th April 2009

USD vs Yen - Daily Candle Chart 20th April 2009

There is very little in the way of fundamental news on the economic calendar today for either the Japanese Yen or US Dollar other than earlier today, when BOJ Gov Masaaki Shirakawa reiterated his cautious stance for the Japanese economy and the broader financial markets.  In brief, he sees the Japanese economy deteriorating even further, particularly for exports which have dropped sharply from a lack of demand overseas, coupled with a fall in domestic demand and all overlain with falling profits from the corporate sector.   In summary, a fairly dire situation for Japan.  Meanwhile in the US we have the CB (Confidence Board) Leading Index – a composite index based on 10 economic indicators.  The forecast is for a slight improvement at -0.4% against a previous of -0.2%, which even so still registers the longest recession in the post WWII era.

With risk aversion returning to the equity markets traders are buying the dollar against the euro but selling it against the yen making the move back over $100 very difficult for the time being.   From a technical perspective Friday’s candle was yet another in a tight trading range and squeezed between the moving averages, and once again falling to make any attempt to breach the $100 area and above.   Whilst the dollar yen has continued to fall in this morning’s session current prices still remain above the key support area immediately to the left on the chart, but if this is penetrated, along with a break through the 40 day moving average then we may have to consider that the attempt to move higher and vault over the 100 price point has failed, leading to a short term reversal before a further effort to move back up is made.   For this particular pair I would suggest keeping a close eye on the equity markets to see if the recent bullish rally continues or is extinguished.  My trading suggestion for today is only to trade intra day and to try and find small short positions in the 15 min chart.

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