Fri, 01 Oct 2010 00:00:00 +0200

USD/JPY Continues to Weaken

The downtrend of the USD/JPY continues and has shown few signs of slowing since the Japanese Ministry of Finance intervened in the forex markets over two weeks ago. Traders are once again testing the resolve of the ministry and the Bank of Japan (BOJ) to intervene. There is no said line that is drawn in the sand that once crossed the BOJ will begin selling yen on the open market. But it appears traders are targeting the recent low for the USD/JPY at 82.86. A glimpse of hope for a reversal in the trend lies in the ascending wedge pattern that has formed on the monthly chart. A rise in the price could test the resistance level at 90.80. A close above this on a monthly basis would confirm a breakout to the upside. However, there is always a chance the pair will continue and break to the downside. Traders should eye a breach below the 82.80 level for a sign of a continuation of the downtrend.

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