Dollar/Yen Weakens Amid Intervention Doubts

The Dollar/Yen erased its overnight gains this morning as traders expressed doubt that an intervention occurred during last night’s session. After holding a key 50% level at 84.40, the USD JPY rallied sharply higher, but the rally failed to gain traction and the currency pair broker sharply to the major .618 level at 84.04.

The Dollar/Yen erased its overnight gains this morning as traders expressed doubt that an intervention occurred during last night’s session. After holding a key 50% level at 84.40, the USD JPY rallied sharply higher, but the rally failed to gain traction and the currency pair broker sharply to the major .618 level at 84.04.

Strong demand for risky assets and an improved outlook for the European economy helped the Euro reverse course last night, setting up a strong rally during the New York trading session. The charts indicate that the EUR USD is set up for a rally into a major retracement level at 1.3510. This price represents a 50% correction of the November 2009 top at 1.5144 and the June 2010 bottom at 1.1876.