The Dollar-Yen broke its low of 84.80 (created 26-Nov-2009) at yesterday's trading creating a new low at 84.72. Although 84.80 was broken, the signal from the MACD is not strong enough to initiate a Sell entry.
From the daily chart, the Dollar-Yen look quite over sold and I am not expecting the declines below 84.80 lows to be sustained. On the other hand, I am expecting once 84.80 is broken out, the Dollar-Yen is ready for a major upside corrective move. This corrective move (or retrace) could be seen as a necessary move before the Dollar-Yen resume its long term bearish move.
One possible trade setup will be to go long on the failure to break 84.72 - 84.80 area with a proper candlestick reversal confirmation.
I will continue to observe this pair and will update as soon as I see a trade opportunity.
Happy trading....
