Is Yen rally over stretched?

Even in a trend market hardly moves in one direction. So even we at FxWirePro, are big bull in Yen (our final target 98.5 per Dollar), we hardly expect it to be one directional move, so corrections are very much likely.

Getting the time right for the correction, would not only help book interim profits but also prompt to wait for the right opportunity to reentry. It is most vital for late entry's. We think, Yen's rally is getting a bit overstretched, and a correction could soon be following. Excluding, 5th February's flat movement, Yen has now gained against Dollar for almost nine days. Such a stretched gains weren't experienced ever since Bank of Japan (BOJ) introduced monetary easing back in 2012. Last time Yen rallied this much was back during 2011, era of Euro Zone debt crisis, Fukushima Daichi nuclear incident.

Other indicators, such as Relative strength index, oscillator also pointing to oversold for Dollar/Yen.

Other Yen pairs, also showing signs of stretch. Yen has gained for eight consecutive days against Pound.

However, price action is still suggesting there could be some further gains, before a correction. Nevertheless it would be appropriate to exercise caution, especially for those entering late or trading short term.

Yen is currently trading at 112.5 per Dollar, up 0.65% today so far.