Chart of the day: Japan’s vernal equinox
Marking the official start to the spring season, Monday was a Japanese holiday enjoyed by many. Yet we worry that thin markets might exacerbate pressure on the yen. For five consecutive weeks, it has been precariously poised on Fibonacci retracement support (taken from 2014’s low) at 110.50 against the dollar. This consolidation took place below the neckline of a major head-and-shoulders top, below the weekly Ichimoku cloud, with the lagging line clinging to its lower edge at 111.50. Friday’s close was the lowest since October 2014 and bearish moving averages could force an imminent break lower. This would suggest a strengthening of many major currencies and across the board dollar weakness.
Nicole Elliott is a technical analyst