By Mohammed Isah of fxtechstrategy.com
: The dollar-yen currency pair continues to build a bottom after wiping out its January and February losses and opening the second quarter on a constructive note.
However, we would like to see a break and hold above 97.77, the dollar-yen's August 2009 high, to convince the market of further medium-term bullish strength.
With that said, the violation of the dollar-yen's psychological level at 93.00 and the test of 94.76, its 2010 high, remains supportive of further gains toward the aforementioned key support (97.77).
> > Bull or Bear? Vote in Our Poll
A decisive break and close above the 101.43 level, the dollar-yen's April 2009 high, will confirm the end of the bottom-forming process and bring further upside risk toward 103.05, the Oct. 12 high, or even higher.
The monthly studies are bullish and pointing higher, suggesting further upside gains.
Although USD-JPY has backed off its 2010 high at 94.76, that pullback remains corrective of its rally from its 2009 low at 84.80.
On the other hand, support starts at 92.94, the March 25 high, with a break aiming at the 92.13 level, the Feb. 19 high. That should reverse roles and offer support, thus pushing the pair back up again.
Overall, with a break and hold seen above the dollar-yen's long-term rising channel (clearly seen on the weekly chart), we expect a recapture of the 97.77 and 101.43 levels during this quarter.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.