As we have expected in Friday's report, Dollar-Yen broke the support 90.75 and reached both suggested targets 90.16 & 89.61 successfully. This drop that started on Thursday and continued into the new week, was the result of stopping near Fibonacci 61.8% resistance at 9.52, and as you know, stopping near Fibonacci resistance levels is an evidence that the trend in down. But on the other hand, the abovementioned drop cashed in 250 pips approximately, which could create a correction from here.

That is why we prefer to wait for a break of short-term support 89.61 or short-term resistance 90.23 before talking about the direction of the next move from here. If we break the support 89.61 the downtrend will continue, and will target 89.07 and the important 88.64. And if we break Thursday's low 90.23, we will be heading to a test of short-term Fibonacci 61.8% at 90.68, and only if it is broken, we will expect a retest of the broken channel at 91.28, which would be an important test if it happens.

Support:

• 89.61: previous support & Oct 12th low.

• 89.07: previous intraday support.

• 88.64: Oct 9th low.

Resistance:

• 90.23: Oct 29th low.

• 90.68: Fibonacci 61.8% for the short-term, important resistance.

• 91.28: the retest level of the broken channel.

Forex trading analysis by www. forexpros. com – Written by Munther Marji