Friday, January 17, 2014

USDJPY Dollar/Yen Daily Chart

The dollar/yen sideways symmetrical triangle breakout occurred in early November. The two vertical sides of the triangle target a gain of about 6 to 9 handles. Thus, from the breakout at 98, this targets 104-107. Price has achieved this range to satisfy the pattern but the dollar/yen bulls will be quick to tout that the 107, or higher target, is still feasible. The near universal consensus of traders is that the dollar/yen will hit 110 and lots of traders are looking for 125 this year. You know what always happens when the boat is loaded to the one side. The consensus call is remindful of the euro call a year or two ago when everyone was looking for parity with t he dollar at 1.00. Instead the euro bounced off 1.18 and never looked back now at 1.36.

The weaker yen (reference the XJY chart this morning) sends the dollar/yen higher as well as Japan and US stock markets. The rally in the dollar/yen clearly illustrates why equities rallied into the end of last year. The red lines show the rising wedge, overbot conditions and negative divergence spank down that was forecasted and occurred. It is in essence the mirror image of the XJY positive divergence at its bottom 3 weeks ago. The dollar/yen, like other currencies, may simply want to stumble sideways for a few weeks and months to come. Price is favoring a stroll through the 103-105 range currently so a break above or below this range will be telling. The dollar/yen is 104.40 as this is typed. If dollar/yen moves higher, markets move higher. Be sure and yell "Banzai!"  If dollar/yen moves lower, markets move lower. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.