Richard Perry
Independent Analyst
USD/JPY
Dollar/Yen has spent the past few sessions hovering around 110.20, and holding the breakout above 109.70. However, the fear has been that, like so many previous attempts, the breakout would quickly consolidate and fall away again. It has taken a few days, but an early slide back today could be a move now that ushers in a correction. Momentum indicators are worth watching, with the RSI dropping back. The RSI failing below 60 (on a closing basis) would be an important signal that would suggest the bulls losing their strength. The hourly chart shows that there has been a rolling over of the breakout, however, it would need a breach of 109.70 (the breakout support) to really suggest that a corrective move was setting in. So the reaction to this morning’s early selling will be important. If it is confirmed as the US traders return to their desks, then a breakdown below 109.70 would be the threat. Holding above 109.70 support is needed to maintain a positive outlook for this breakout. Resistance at 110.20/110.30 is growing too. A closing move clear of 110.20 opens 110.65 and then towards 111/112.
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