Let's Learn & Earn at Any Time, At Any Where, At Will :): Will Yen Weakness Buoy up the Dollar?

Thursday, December 10, 2009

Will Yen Weakness Buoy up the Dollar?

Will Yen Weakness Buoy up the Dollar?

Is there an End to the Yen Trend?

Based on Technical indicators and the relation of the USD/JPY with the 200 SMA, I believe that traders should....

look to short this pair on any rally up to the 89.00 area. The recent USD/JPY rally was soundly rejected at the 90.77 high back on December 3rd. Currently price is hovering in a tight 50 pip range between 87.50 and 88.00.

The USD/JPY is still trading below its 200 SMA on a daily chart which is a bearish sign. However, shorter time frame oscillators are showing that we could get a small USD/JPY rally before dropping to a target area in the 86.00 area.

The FXCM Speculative Sentiment Index reveals that there are nearly three traders long for every trader short the USD/JPY. SSI is a contrarian indicator that tells us that the USD/JPY should move lower.

Use an oscillator like stochastics or RSI on a 4 hour chart to pinpoint a sell entry. Wait for the indicator to cross above its upper reference line and then cross below. Confirm this with a break of the rising 4-hour chart trend line (H4) on market scope.

Read more: DailyFX - The Trend of the Day - USD/JPY http://www.dailyfx.com/forex/education/trading_tips/trend_of_the_day/2009-12-09-1913-The_Trend_of_the_Day.html#ixzz0ZFNQlYCN

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