The Yen Is Back With A Vengeance!

I apologize for not posting yesterday. I was out of town on vacation and wasn’t able to get to a computer. It’s good to be back though and I’m excited at what’s going on in the markets.

And what a crazy day in the markets it was! The Dollar took a big tumble as equity markets all over the globe took some big hits. Is this just noise? Or are we about to see a new long term trend in the Dollar? Let’s look at our charts to see if we can find any opportunities…

Chart Analysis:

EUR/USD

After falling to 3100, the Euro made another strong rally and shot up to a new high of 3258. Both 4hr and daily stochastics are in overbought territory which indicates that the pair could see some retracement in the short term. Look for the pair to fall to around 3200.

GBP/USD

Once again the Cable showed erratic movements today going both up and down, and finally ended up closing slightly down today. 4hr stochastics has crossed down and daily stochastics is about to cross down but hasn’t gotten into overbought territory yet. The pair also faces support around the 9570 area with both its 50 EMA and 100 SMA around that level. If the pair can break those support areas, then there is a good chance the pair will run all the way down to 9500.

USD/CHF

Well it looks like the triple moving average resistance area proved to be a force to be reckoned with as the pair violently bounced down from that area. After failing to close above those 3 moving averages for several days, the pair finally gave in and plummeted to a new low of 2150. Both 4hr and daily stochastics are in oversold territory which means we could see a short term retracement. Look for the pair to retrace back up to around 2200.

USD/JPY

After such a long period of time of getting pummeled by the other currencies, the Yen finally made its comeback. And it did it with a vengeance like no other! The Yen gained approximately 325 pips today against the Dollar. The question is whether or not this trend will continue. The previous rally where the Dollar ran up agains the Yen started at around 114.50. If this is a true comeback for the Yen, then we could still see alot more downward movement in the pair since that is still another 350 or so pips away from the current price at 118.00. We might not see the pair drop in a short time, but we could gradually see it fall to this level. 4hr stochastics are currently in oversold territory and have been for an extended period of time. Currently the market is retracing and we could see the pair move to 118.50. Daily stochastics on the other hand are trending down so we could still see the pair fall some more after this retracment. Look for the pair to move down to its 200 SMA on the daily chart.

  • Tangara

    My trading system caught this move on the USD/JPY pair, and I made a handsome profit. I will be looking to go short again in a few days time.

  • Tangara

    My trading system caught this move on the USD/JPY pair, and I made a handsome profit. I will be looking to go short again in a few days time.