The second most important currency index is the Japanese yen and moving to the daily chart, the price action here is more laboured and also reflects the indecision created by recent political events in Japan with the snap election now on the horizon.
From a technical perspective, late September and early October have seen the index trading in a congestion phase, building a ceiling of resistance in the 7690 area, coupled with a gently rising floor of support and indeed this would seem to suggest a degree of bullish sentiment for the currency. Indeed the index followed a similar pattern in late July and early August with the index rallying strongly from the congestion phase in this area and moving back to test the 8000 area, and as such we could be seeing a repeat provided the index moves firmly through the 7700 level.
By Anna Coulling
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