The dollar this week has extended this year's downtrend
against the yen, and charts suggest that traders have to give the dollar more
room on the downside.
The dollar Wednesday fell to Y91.79, which is the current low for the
downtrend from the April high of Y101.49. It's technically weak in Thursday
trading below Y93.04, but the practical difficulty for traders is the fact that
the dollar now is also crowding a potential interim bottom at Y92.46.
Finally, if trades are stopped above Y93.04 then the dollar would be on the
up to Y95-area targets.
More alluring for the dollar bears perhaps is the possibility that decisive
trading below Y92.46 might point the dollar down to Y87.31.
The point is that a long-term downtrend is effective now. See chart at this
Web address:
http://www.dowjoneswebservices.com/chart/view/2402
The dollar's immediate technical context is the downtrend from the 1998 high
of Y147.71. The downtrend low, recorded late last year is Y87.09. It's
remarkable that the dollar finished 2008 trading at Y90.75 and that 2009
trading began at Y90.74, so traders can anticipate an important long-term
interim bottom if and when Y90.75 is tested.
Euro Pushes The Yen Back
The euro, near Y130, is technically strong on the daily chart above Y125.66
and it's going for Y132-area resistance. But a convincing move below Y125.66
would be the signal for a dip to Y123.35. In that case extended lower trading
would be targeting Y115.06.
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