Dollar / yen has been mostly consolidating between 118.60 and 116 since hitting an 11-month high at 118.65 on December 15. However, price action has been somewhat bearish today as this consolidation range appeared to be breaking down on the downside.
Looking at the shorter-term 4-hourly chart, price is currently below the 50-period moving average but it is holding above the 200-period average at 115.13. Below that is the near 1-month low of 114.74, so bulls should not worry as much as long as these key levels are not violated.
The Relative Strength Index is bearish at 35, but it is also getting close to the 30 oversold reading. Interestingly, at the time of writing the pair climbed above 116 and back in the consolidation range of the past 3 weeks or so.
To sum up, the recent correction in dollar / yen may have some more room to run before it becomes oversold, but as long as key levels around 115 hold, this could be an opportunity for establishing fresh longs rather than something more worrying for the bulls.
Origin: XM
