The Japanese yen is one bearish looking currency. Since peaking in march, the FXY etf has clearly been in a down trending channel and recently had a cross of death (50 dma / 200 dma crossover) on the monthly time frame (not yet on the daily). I wouldn't bet against the yen just yet though. The cross of death is clearly a lagging indicator since it involves the fifty day average price falling below the 200 day average and the FXY CCI crossed zero a long time ago (a leading bearish indicator). If you look closely at the more recent chart action you'll notice FXY has found support repeatedly at $92. If the yen can stay flat or move higher in the coming weeks, say above $96, then a big rally could be in store. On the other hand, if $92 breaks I'd expect the next leg down to begin in earnest. Its also worth noting the well established counter trending nature of the US stock market and the yen. Its time to pay attention to the carry trade again.
No comments:
Post a Comment