FXstreet.com (Barcelona) - The Dollar remains weakening against the Yen and, after its rejection at 90.00 level on Monday, the pair has dropped to 88.85 low on Tuesday on its way to a re-test of this year's low at 87.10, according to Nicole Elliott, senior technical analyst at Mizuho Corporate Bank.
The Question, according to Elliott is whether the 87.10 level will be tested this month or the next: The question now is whether we will re-test this year's low at 87.10 this month or later this quarter and, after that, how much lower might we go. The pace of the move is likely to determine how low and for how long the move persists. The faster the move, the sooner we meet target, and the greater the subsequent bounce.
Furthermore, Elliott adds that the possibility of testing the critical 87.00/85.00 watershed should not be discarded: At the moment we estimate that chances of a test of the critical the 87.00/85.00 watershed this month are 50:50 or less; the chance of a break below 85.00 within the month at negligible. Therefore the most likely scenario this month is for a series of random moves between 87.00 and 92.00.