Dollar-Yen penetrated the important 89.79 before sharply striking up to 90.41, in what could be an attempt to fish stops below this important level. Our attention is still revolving around 89.79, the most important support at all for now. As we have said in last week reports, the importance of 89.79 comes from the fact that it is the 61.8% Fibonacci retracement level for the whole up move from 87.35 to 93.75. This very accurate stopping indicates that Fibonacci 61.8% has stopped in the way of more dropping, and could cause it trouble.

And although it was penetrated during the Asian session, the price showed strength and came back to trade above it. Thus, we will consider 89.79 to be a support capable of reversing the short term direction and initiate a rising move from these levels. In case this support is broken (again) the drop will continue, targeting 88.91 & 88.30. In this case 92.44 will be a critical resistance for both short & medium term. But, in the case of holding above 89.79, the price will move up to challenge the previous important support 90.30. Breaking this support will put attention at two important resistance levels and they are the short term 61.8% Fibonacci resistance level at 91.06 and then the falling trend line from 93.75 which is currently at 91.64.

Support:

* 89.79: Fibonacci 61.8% for the whole rising move from 87.35 to 93.75.

* 88.91: Dec 18th low.

* 88.30: Dec 14th low

Resistance:

* 90.30: previous important support.

* 91.06: Fibonacci 50% for the short term.

* 91.64: the falling trend line from 93.75.

Forex Trading Analysis written by Munther Marji for http://www.forexpros.com.