Dollar/Yen Bullish Digestion Pattern
Currencies / US Dollar Nov 05, 2011 - 03:39 AM GMTAlthough USD/Yen has been trading in a relatively narrow range between 78.40 and 77.80 since mid-session Monday after Sunday evening's BOJ intervention (to sell yen and buy USD), all of the action off of the intervention high impresses me as a bullish digestion period ahead of another up-leg.
At this juncture, only a decline that breaks and sustains below 77.80 will morph the digestion pattern into something a bit less constructive. My sense is that the BOJ is under the market bidding for dollars beneath 78.00. The longer the BOJ contains new speculative selling pressure at or above 78.00, the greater the likelihood that USD/Yen shorts will "give up" on their positions for fear of getting caught in another painful round of BOJ intervention.
ETF traders may want to watch the ProShares UltraShort Yen (YCS).
Sign up for a free 15-day trial to Mike's ETF & Stock Trading Diary today.
By Mike Paulenoff
Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.
© 2002-2011 MPTrader.com, an AdviceTrade publication. All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.
Mike Paulenoff Archive |
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.