The December contract for the 6J yen/usd on the daily chart is once again testing a key level in early trading, with yen weakness prevailing through the morning session, and reflecting a return of risk on sentiment ahead of the much-anticipated comments (not) from Fed chair Janet Yellen. She has clearly embraced the FED mantra which is to confuse, obfuscate and befuddle at every opportunity, and no doubt more of the same later.
For the 6J contract, the technical levels are clearly defined, with the ceiling of resistance in the 0.0100275 area denoted with the blue dashed line of the accumulation and distribution indicator, and marked with several failures at this level with the pivot highs. The bearish sentiment of October has driven the pair lower and now testing support in the 0.0096030 area, a level which to date has held despite being tested on three previous occasions. In early trading this level is once again under pressure with the pair trading at 0.0096035 at the time of writing, and should this level be taken out, then the pair look set to move lower and down to test the platform of support in place below in the 0.009400 area. Above, the volume point of control remains firmly anchored in the 0.0098550 area and adding further downwards pressure to the pair with the trend monitor indicator confirming the current bearish picture.
This bearish technical picture for the Japanese yen is also reflected on the yen index, which itself is also testing an important level in the 8800 region, with yesterday’s weak up candle confirming the current sentiment. Should the 8800 area duly be taken out, further potential support awaits at 8750 with a more sustained region awaiting in the 8625 region on the daily chart.
By Anna Coulling