The Japanese Yen continues to strengthen against the American Greenback and is testing the support level at 78.00 for the second time in as many months. Price tested this level at the end of May, falling as low as 77.65 before reversing and retracing some 290 +/- pips in June. Price started falling again the last week of June and printed another strongly bearish candle last week. Since the markets have opened this week price has fallen an additional 37 pips to a low of 78.14 during Asian trading. Price appears to be heading for the previous low at 77.65 and will possibly give us another Bullish Bounce at that level. However, if the previous low is broken, prices may fall to 76.45 or even re-test the lows at 75.56. To get that low, there are many technical support zones in the way as price consolidated between 75.56 & 78.25 from July 2011 to February of 2012. Key levels are 77.83, 77.30 & 76.44...not to mention that there may be an intervention from the BOJ like we saw in March of 2011 in an effort to devalue the currency and boost exports. If price reverses there is also plenty of Resistance above at 78.67, 78.98 & 79.39 all being Weekly or Monthly Resistance levels. The strongest of which being the area around 78.98 aka 79.00 where we saw price consolidate for about 6 weeks earlier this year.
Happy Trading!