Another currency that has been in the spotlight recently has been the Dollar Yen. We have seen a bit of a flattening of the US yield curve of late which has weakened the pair over recent sessions. It currently feels very range bound. Are we ever going to break this range?
Craig Erlam, Senior Market Analyst for Oanda thinks that we will. Dollar Yen is hitting resistance at 114.00 114.50 zone. This isn’t the first time that this has happened so it shouldn’t come as a surprise to anyone. There are clear cut levels to look at this in the pair. Craig believes that that we are looking at 114/114.50 to the upside and 113 to the downside.
On the bullish front, there are multiple concerns in the technical outlook. When the candles were moving to the upside you can see a large number of long upper wicks. This shows that the pair has rallied in the 114/114.50 zones and it has been rejected and closed much lower. However we have not had a rotation lower off of the back of it yet.
On the bearish front there are some signals to look at. 113 was resistance on the way up. It was also support when we had a brief correction a couple of weeks ago. 113 is big level below, break of that would be a signal of another correction. This could signal a move back towards 112/111.50.
However Craig does believe that this is still looking bullish. Only a break of 113 would make Craig think otherwise, but it seems to be holding strong and constantly testing the highs.