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Dollar/yen: The pair is now consolidating following its hammer triggered recovery off the 79.59 level, its May 05’2011 low. On a further strength, the pair should aim at the 81.70 level, its May 02’2011 high with a violation of there targeting the 82.80 level, its April 27’2011 high.

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A cap is likely to occur here and send the pair back down again but if this fails, we may see further gains towards the 83.09 level, its April 20’2011 high. Its daily stochastic is bullish and pointing higher supporting this view.

The risk to view will be a return below the 79.57 level. This will set the stage for further weakness towards the 78.00 level, its psycho level and then the 76.18 level, its 2011 low where a break will resume its long term downtrend towards the 75.00 level.