XJY Japanese Yen Daily Chart Channel Potential W Pattern Bottom

The yen continues to strengthen. Note the drop in the dollar/yen pair to 104 today. In general, a strengthening yen sends dollar/yen lower, and stocks lower. If the BOJ is printing money and weakening the yen, the dollar/yen moves higher and stocks move higher. The BOJ pumped global markets higher last year. The chart shows the drop in the yen from October to now creating the late-year stock market rally. The falling green wedge, oversold conditions and positive divergence was highlighted 7 trading days ago and the bounce occurs. A blue upward-sloping channel is now in play as the yen prints higher highs and higher lows.  The indicators (short green lines) are long and strong across the board wanting more highs after any pull back occurs.

The W pattern bottom is small at this point and targets 97 but a W forming under both the 20-day MA and 50-day MA is a powerful force. Moving forward, the yen may move up to the 50-day MA to create the middle segment of a larger W over the next couple months which would produce a higher price target in the 101-103 zone. The projection is for the yen to move sideways with an upward bias through the year. This behavior would send the dollar/yen lower down through 100 into the 90's again. 95% plus of analysts and traders expect the dollar/yen to run higher to 110, 115 and 120 this year. For this to happen, the XJY chart above would fall through 95 and head lower into the 80's, but the indicators are pointing the other way. 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.