Chart of the day: Yen-dollar support faces test
Following its rate-setting meeting and review of monetary policy and after Tokyo markets closed on Wednesday, the Bank of Japan announced its decisions. Unable to react because of the Autumnal Equinox holidays on Thursday and Friday, we will have to see how local firms and investors take the news on Monday. The foreign-exchange market continued trading regardless and the verdict appears to be that the key support at 100 yen per US dollar will be seriously tested. Not only is it a big psychological level, but also the halfway point between the 2012 low of 75 yen and last year’s high of 125 yen. The right-angled triangle consolidation and the steadfastly bearish 50- and 200-day moving averages suggest a break lower.
Nicole Elliott is a technical analyst