Since JPY is the quote currency in yen pairs, this means that the Japanese yen weakened against all currencies.
Is it now time to go long JPY?
Let’s take a look at how JPY pairs have been doing lately…
Aside from USD/JPY, all JPY pairs all have a negative return for the past 30 days. Remember, since JPY is the quote currency (the second currency in the currency pair), this means that JPY’s performance has been positive.
So if you had bought JPY against any of the major currencies (except USD), and held for 30 days, you would’ve been profitable (excluding rollover costs).
What about for the past 3 months?
The last 3 months have not been kind to Japanese yen bears. As you can see above, ALL yen currency pairs have been negative.
This means that JPY has been strong over the last 3 months.
What about over the last 12 months?
Pretty similar situation here. JPY has been strong over the past 12 months as well.
Price momentum has been NEGATIVE over a 30-day, 3-month- and 12-month range for JPY pairs.
This means that price momentum for JPY has been positive.
What about their long-term trend direction?
All JPY pairs are still in a long-term bearish trend, although this trend does look to be weakening for a couple of them.
Another way to analyze trends is to see where a currency pair’s price is relative to its moving averages.
For example, is USD/JPY above or below its 20 SMA? Is it above or below its 50 SMA? And so on.
We can easily see this on MarketMilk™ with the “Is Price Above/Below Its Moving Average?” chart:
There are a lot of dots on the chart but you can ignore all of that for now and just look at the bottom first in the yellow area.
This tells you exactly how many currency pairs are above or below a certain SMA.
It’s clear that all JPY pairs are bearish. From the 20 SMA down to the 200 SMA, almost all pairs are BELOW their respective SMAs.
Only for the 50 SMA are there some JPY pairs that are trading above their SMA.
With this chart, it’s plain to see that the Japanese yen has been strong since almost all JPY pairs are bearish across different SMAs.
This means that JPY itself has been in a bullish trend.
So should you buy JPY?
Leave your answer in the comments below.