Dollar-Yen broke 88.59 and reached the target suggested in yesterday's report with astonishing accuracy when the drop stopped at 87.98, compared to our first target 87.97. Then it went up to 89.38 sharply in what might turn out to be some sort of intervention by the Japanese government. And now, it is moving above the important support 87.97, which is the key to reach 87.10.

On the other hand, the resistance 89.38, which is close to the top of the triangle formation, is going to be the resistance of the day. If we break 89.38, short-term direction will be up, which would give a chance to go above 90 again, where the first important resistance in this area is the limit of the downtrend 90.40, which represents the falling trendline from August 9th top. Just below it there is the moving average SMA10. There are several resistance levels between here and the strong 91.63. If we break 87.97, the direction would stay as it is (down), and that would mean we are on our way to test or may be break the 14-year low 87.10.

Support:

• 87.97: Jan 23rd low.

• 87.10: 2009 low.

• 86.40: previous support from 1995.

Resistance:

• 89.38: the upper trendline in the supposed triangle pattern, most important resistance for the short-term.

• 89.96: Oct 5th high.

• 90.40: the falling trendline from Aug 9th top.

Forex trading analysis by forexpros. com - Written by Munther T. Marji