Richard Perry
Independent Analyst
USD/JPY
A third bearish candle in as many sessions sets Dollar/Yen on a corrective path. We talked yesterday about the downside implied target of 109.20 from the top and this has all but been achieved already. The bulls will be looking to build support around the 109.00 medium term pivot, but given the magnitude of recent candles, the deterioration in momentum and downside potential, there could be further to run in this move. The RSI pulling below 50 would be a trigger to see a correction back into 35/45 area that has been consistent since August, whilst the MACD and Stochastics lines are only just bear crossing now. The breakdown at 109.70 is now resistance and a pivot line today, and a failure of any recovery around here would be a selling opportunity. The resistance in the band 110.20/110.30 is growing stronger. Initial support at yesterday’s low at 109.25.
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