Dollar/Yen was stronger than expected yesterday and so raises the prospects of a new rally developing.It is making positive developments in relation to a number of daily-based aspects, but its short-term action has a corrective structure.These opposing views would be accommodated by a broader range developing.It appears that a minor rally sequence finished at 116.95 early yesterday and it was retraced with the drop to 116.50.The current rally sequence has paused at 117.40 and will drop back to 116.90 today before proceeding towards 117.90.I expect 117.90 to contain the rise – if it gives way, then 118.20 should stop it.A secondary drop for the broader consolidation should commence, holding to the 116.50/117.00 region initially and then falling back to 115.80.
Euro/Yen could only manage 147.80 yesterday and then it turned downwards to suggest that a broader consolidation is in progress.It should drop back to the 146.60/80 region over the next day or two to complete the consolidation pattern.But then the rally should resume for an eventual test of 149.00.Only a drop through 146.20 will suggest that a new decline to retest key support around 144.95 is underway.
Aussie/Yen drifted a little higher yesterday but the narrower range warns that the rally is peaking.88.60 should contain the rise today and Aussie/yen should drift back to 87.80.
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