The inverse head and shoulders pattern seen recently in the USD/JPY met its target almost perfectly and failed at the previous highs from 2010 that are clustered between the 92.32/94.77 levels. The recent high was 94.77, which was conveniently the exact high in April 2010. According to William Moore, a Technical Strategist at RBS, “From a technical perspective after the extraordinary move higher we’ve witnessed positions look to be lighter and now I look to the 91.24/94.77 range for the significant break. Breaks higher from this consolidation and 97.50 becomes the target, where as breaks lower open the 61.8% retracement of this recent range at 89.56.”
Political uncertainty and strong data keep the USD buoyed
The US dollar has continued to advance versus most competitors on Tuesday benefited by broad risk aversion, although it received a fresh boost after the US economy reported better than expected housing, manufacturing and confidence data. Not even Bernanke's comments supporting the Fed's accommodative stance were enough to prevent the greenback from rising.