How to trade dollar vs yen

The US dollar  vs The Japan Yen (FX:USDJPY)

This particular pairing is usually quite logical in its behaviour. The results in the immediate situation where we’ve no choice but to regard it as heading toward ¥102 currently. Some sort of bounce is probable at ¥102.

However, there are quite serious implications should the ¥102 level break as a drift down to ¥96.5 seems very possible.

The visuals associated with such calamity are far from good. We bang on about lower lows and warn, should ¥96.5 make a guest appearance, this pairing will breach the lows of 2016 which would be a really bad thing, suggesting a future price tag of ¥75 shall make itself known.

The funny thing about this particular disaster is the jaggy pink line on the chart. Historically, this relationship has a glass floor at roughly ¥101 with a break below such a level bringing near certainty to the future presence of ¥75.

To escape this mess, the pairing requires better the dashed blue line on the chart, currently ¥112.6.

A movement such as this will prove fairly significant, allowing for ¥115 initially with secondary, if bettered, a further ¥121.

Somewhat amusingly, this will imply a future donk against the long term downtrend from 28 years ago, a trend which has proven unbreakable so far.

We would anticipate some strong growth in the event this currency pair manages a miracle movement upward.

That’s it with forex for now. We shall revisit the terrible trio GBPUSD, GBPEUR, USDJPY in another few months to check what’s been happening.

Source: interactive investor            Past performance is not a guide to future performance

Alistair Strang has led high-profile and “top secret” software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know “how it worked” with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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