1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

USD/JPY Stabalization in the Forecast

Discussion in 'Technical Analysis' started by FastBrokers, Feb 25, 2009.

  1. FastBrokers

    FastBrokers New Member

    Feb 23, 2009
    Likes Received:
    Los Angeles
    The USD/JPY is finally experiencing some profit taking after its incredible run over the past couple of weeks. The Carry Trade has obviously unwound, and investors are beginning to judge the currency based on the comparative health of the two economies. With Japan being the poorest performing economy in the world at present, the U.S. Dollar is experiencing a rapid appreciation against the Yen. Paradoxically, the depreciation of the Yen provides a much needed relief for Japanese manufacturers and exporters. Since these companies compose the heart of Japan’s economy, the rise of the USD/JPY greatly aides Japan. Therefore, if the U.S. economy continues to destruct while the USD/JPY rises, we may see an improvement in Japan and a subsequent stabilization of the currency pair. While the USD/JPY may give up some of its gains today, the currency pair still has momentum on its side. However, the USD/JPY is stuck in its long and debilitating downtrend, and it will need to overcome many obstacles including 100.00 before we can change our general negative stance on the currency. Considering this, if the S&P futures were to plunge below 2008 lows, it wouldn’t be too surprising if the USD/JPY experienced a sharp selloff itself. Fundamentally, we maintain our resistances of 96.71, 97.22, 97.66, and 98.25. To the downside, we hold our supports of 95.95, 95.43, 95.02, and 94.56. The USD/JPY is currently exchanging at 96.48.
    Read More


Share This Page