Richard Perry
Independent Analyst
USD/JPY
Another remarkable session of swinging sentiment on the dollar saw the eventual formation of a second decisive positive candle for Dollar/Yen. For a second consecutive session, an initial move lower was used as another chance to buy and this marks a significant shift in sentiment as the recovery begins to really develop now. The hourly chart shows the decisive move above 104.85 resistance to complete a small base pattern and imply +85 pips of additional recovery. This may not sound like much but there has been a significant shift in the outlook over the past couple of sessions where a recovery is now building strongly. Momentum indicators are reacting strongly too, with a bull cross now on Stochastics, whilst RSI has also turned higher. Early gains today add to this move. There is upside potential in this near term bounce, but the daily chart shows the need to pull through the initial overhead supply 105.10/105.30 from all the old August lows. This is being tested this morning. Above 15.30 brings the market up towards the old 106 pivot area again. The hourly chart shows 104.85 is growing as neckline support above 104.40 as a higher low.
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