The yen climbed against the world's 16 most-active currencies as widening credit market losses prompted investors to cut holdings of higher-yielding assets funded by loans in Japan.
The currency gained most against the New Zealand, Australian dollars and the South Korea won, as investors reduced so-called carry trades. It also rose against the Euro as stock indexes tumbled in all 15 major Asian markets on concern losses linked to subprime mortgages will spread. The Bank of Japan joined central banks in Europe and the U.S. in providing cash to banks to ease a credit crunch.
The yen pared an advance of as much as 0.4 percent against the dollar as traders cut bets that the Bank of Japan will raise its 0.5 percent benchmark interest rate this month. The chance of the BOJ increasing borrowing costs at this month's meeting fell to 28 percent from 65 percent yesterday, according to calculations by Credit Suisse Group using overnight index swaps. The central bank's two-day meeting ends on Aug. 23.

The selling point is at 161.70 or 161.60; triggered by the breaking of the Gann fan line downwards and failure to reach higher than the previous peak of 162.70; the market is in a downtrend trend.

- Previous support is the take profit at 160.50
- Gann Fan 3rd line represents the stop loss at 162.70


The Buying Point is the break of Gann Fan 2nd line at 162.15

- Gann Fan 4th line will be the take profit at 163.60
- Previous support will become the stop loss at 160.50

To strengthen our analysis; we use many other indicators, starting with TRIX which gives us the market direction and in this case it shows us a bearish signal. In order to find the average of the market volatility, we use ATR (Average True range).With ATR; we can determine that the market last 14 hours volatility is 41 pips.

The zero line of the ROC (Rate of Change) is very important to understand the strength of the market and as we see on the graph; it breaks the zero line and moves downwards. We should always look at the trend line or Gann Fan; and in this example it breaks the levels of the Gann and is in the last level. Most of the indicators show us the weakness of the Euro against the JPY and the continuation of the down movement.

*The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.

By Finotec’s professional analyst,
Tony B

dealingdesk@finotec.com