Richard Perry
Independent Analyst
Once more, as with the euro, the strength of the yen has broken a key trendline but not breached a key reaction price level. The 117.22 support is key as this is the first important higher low of the old uptrend (which broke last week). Momentum indicators are now deteriorating near term but, again, could simply be unwinding the bullish configuration. The 117.22 support takes on added importance on Dollar/Yen as it protects what could now be a head and shoulders top, with a breach implying further correction and a likely retracement back towards the 100% Fibonacci projection level again at 113.77. The intraday hourly chart shows that in the past couple of days 119.00 has become a basis of resistance as an element of consolidation has crept in. However, the re-election of Prime Minister Shinzo Abe has done little to improve the outlook so far and the threat of correction continues to loom large. There is a minor element of support at 117.76.
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