Richard Perry
Independent Analyst
The Fibonacci retracement levels on Dollar/Yen have become interesting indicators for the near term dollar outlook. With the rebound off 105.18 now hitting the 61.8% Fibonacci retracement of the 110.08/105.18 sell-off at 108.21, there has been some consolidation. However looking on the intraday chart this should be just a near term situation. The moe above 107.50 yesterday completed a 9 day head and shoulders base pattern that gives an implies target of 109.50. I see this minor correction as a chance to buy. The ideal entry point would be for a pullback to the neckline support now at 107.50, but the improving technical outlook may mean this is not possible. The strong medium term outlook suggests buying into weakness. The next resistance is at 108.73, whilst the bullish base pattern remains intact until a breach of the key reaction low at 106.22.
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