Wednesday September 8, 2010 - 18:10:51 GMT
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Forex Hound - www.forexhound.com
Dollar/Yen making Daily Reversal Bottom
Ahead of the release of this afternoonâ€™s
Federal Reserve Beige Book, the U.S. Dollar is trading weaker against most
major currencies. This report shouldnâ€™t be a market mover, but traders should
read it to gain a little more knowledge into what the Fed looked at when it
made its recent Federal Open Market Committee decisions.
The Japanese Yen is under pressure versus
the U.S. Dollar at the mid-session after rising to a 15-year high against the
Greenback. Strong moves in the equity markets are helping to revive the
carry-trade, underpinning the USD JPY. The Dollar/Yen also got a boost this
morning after Japanese government officials expressed apprehension about the
rise in its currency.
Technically, the USD JPY is forming a
closing price reversal bottom. This pattern, if confirmed, often triggers the
start of a two to three day rally with a minimum objective of 50% of the last
swing down. If this is the case this time, then look for a short-term
retracement to at least 84.63.
The USD JPY chart will get most interesting
if 84.28 is regained. At this time, the Dollar/Yen is set up for a weekly
reversal, but a close over 84.28 will put the market higher for the week,
forming a reversal bottom.
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