Dollar-Yen broke yesterday’s resistance 91.33 and came close to the suggested target 91.87. The question will be the same for today: will we see a bounce to the upside, or a continuation of the drop? Coming close to 91.87 means getting closer to the ideal target area for this bounce which is the area 91.87-92.59.

The odds of stopping inside this area are high, and if this happens what will follow will be another leg down, targeting areas below Monday’s low 90.71. Short term support is provided by the ascending line from this bottom in particular, which is currently at 91.54, and if broken, the odds of reaching a new weekly low will be good, and the targets will be 90.89 & 90.34. In case of a break of the resistance 91.87, we will be on the way to the most attractive target for this bounce 92.59 as a primary target, and if broken we will challenge the 93.20 top.

Support:

• 91.54: the rising trend line from Tuesday’s low on the hourly chart.

• 90.89: important intraday bottom.

• 90.34: support/resistance area on the hourly chart.

Resistance:

• 91.87: Fibonacci 38.2% for the whole move down from 93.75.

• 92.59: Fibonacci 61.8% for the whole move down from 93.75.

• 93.20: Jan 4th top.

Forex Trading Analysis written by Munther Marji