The Dollar/Yen has now made a perfect 61.8% retracement from the December 5, 2005 high of 121.37 to the May 17, 2006 low of 108.96. This is only important if you give any credence to the major Fibonacci numbers. Due to this retracement number being reached it might be a good idea to watch what the Dollar does in light of the fact that the FOMC will be deciding their next interest rate move on Thursday. I like the SHORT side at this level because of the divergences that are taking place in our proprietary oscillators and the overbought levels that we are currently seeing in the Dollar/Yen. Choosing the correct entry point is extremely important when it comes to trading and this is one that I like. So, we're SHORT the Dollar/Yen after this one month retracement. Now it's a matter of waiting to see if our assessment of the market is correct. If we are correct the continuation of the long-term downtrend in the Dollar should be at hand.
Dale F. Doelling
Chief Market Technician
Trends In Commodities.com
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