16 Dec 2014



After breaking the resistance level at 1.2500 rate is heading towards the next resistance level at 1.2600. A break above is needed to trigger a bigger retracement - possibly towards 1.2750 - a level where the falling trendline resistance level could come into play.

Most likely the rate will range between 1.2500 and 1.2600 level till tomorrow's Fed interest rate decision.


The rate is working to break the 1.5763 level which also acts a an inverse head and shoulders formation. The rate has already broken the falling trendline from this year's decline.

A break above 1.5763 should take the rate up to 1.5825 and possibly the major psychological 1.6000 level.

A failure to break through would indicate the rate is heading back towards the range support at 1.5600 level.


After breaking down from the bearish pennant formation the rate together with all the rest yen based pairs and Japanese equity market, is falling lower. Possible targets could be 15.00 and 14.42.

Retracements towards 117.00 will probably be used as short entries as the old support becomes the new resistance.

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