Dollar/Yen failed to extend its rally yesterday and eventually fell through 116.15 to open the way for some more downward action.The exact position of the market is not clear – the mvg avg turning upwards suggests a new rally is developing, but the upward action so far has produced only a 3-wave move.There is considerable support between 114.65 and 115.75 and while this region holds Dollar/Yen can rally again.Only a drop through 114.65 will suggest that a new decline is underway.Dollar/Yen’s rise off yesterday’s 115.85 low is just a pullback so the drop should extend to 115.10/35 today.If the subsequent rise can push through 116.30 then Dollar/Yen can resume its rally.Otherwise Dollar/Yen will drop again to challenge 114.65.
Euro/Yen equalled the 148.60 high yesterday, dropped back to 148.00 and rebounded back to 148.50.It should push above 148.60 today.However, it is unlikely that this rise will be sustained.Also, the next objective of 149.00 may not be reached.Once Euro/Yen fails to hold above 148.60 it will drop back to 147.80 initially and 147.00 later.A break of 147.00 will confirm a return to key supports around 145.70.Only a strong rise through 149.00 will suggest that the rally can continue.
Aussie/Yen should test 89.00 today to complete the retracement of the previous day’s drop and resume its drop for 87.20.
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