On April 6, I posted an update about when the USD/JPY could rollover.
The issue was: When would the yen
outpace the greenback? The answer came as the greenback lost ground right
around 80.30 and sank back lower through 80.00. Although the greenback has not accelerated
much lower from the major psychological level, it offered the yen the small
window it needed to drive the USD/JPY lower.
But that’s not the entire story. For about two weeks now the
question is when will the U.S. equities market break lower and the Dow seemed
well on its way after Friday’s NFP miss. The S&P seemed to be the only
glimmer of optimism and it was sitting precariously on 1,370 support. That
support broke today and allowed the yen to strengthen even more.
Remember it has been gaining on the aussie and euro and the dollar
seemed to be all that was left. It’s no surprise that the day the S&P is
broken is the day that the USD/JPY confirmed it “rollover” trend reversal
entry.
Past
performance is not indicative of future results
The Wave Reversal entry was triggered aggressively
as the 34 period EMA low was broken and conservatively as the 50 period SMA
close was broken. Accompanying each break was a -100 reading on the Commodity Channel
Index (CCI).
The
follow-through now will be dependent upon further weakness in the equities
market coupled with an increasing concern for QE. There will be a pocket of
time where the dollar will remain in a range as QE would weaken it (so it won't rally on fear/risk off), so it’s
likely to trade within the daily triangle pattern that has formed. Fear is heightened today on the
back of concerns in Spain. QE will likely not rally the Dow until it’s a more tangible
reality and at that time we’ll likely see dollar weakness. That said, it’s very
possible to continue to see a choppy dollar and a weak equities market. That’s
exactly what will propel the USD/JPY lower in the near term.
As an active forex trader and Chief
Currency Analyst for InterbankFX.com I do write for a number of sites all over
the web and I am happy to say that I will be posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily
Forex Trading Edge for Raghee to personally answer. Using the icons at the top
of the article to forward this update to a friend via email, post it on Google
or Facebook or simply print it out for reading later.
Forex
trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
On April 6, I posted an update about when the USD/JPY could rollover. The issue was: When would the yen outpace the greenback? The answer came as the greenback lost ground right around 80.30 and sank back lower through 80.00. Although the greenback has not accelerated much lower from the major psychological level, it offered the yen the small window it needed to drive the USD/JPY lower.
But that’s not the entire story. For about two weeks now the question is when will the U.S. equities market break lower and the Dow seemed well on its way after Friday’s NFP miss. The S&P seemed to be the only glimmer of optimism and it was sitting precariously on 1,370 support. That support broke today and allowed the yen to strengthen even more.
Remember it has been gaining on the aussie and euro and the dollar seemed to be all that was left. It’s no surprise that the day the S&P is broken is the day that the USD/JPY confirmed it “rollover” trend reversal entry.
Past performance is not indicative of future results
The Wave Reversal entry was triggered aggressively as the 34 period EMA low was broken and conservatively as the 50 period SMA close was broken. Accompanying each break was a -100 reading on the Commodity Channel Index (CCI).
The follow-through now will be dependent upon further weakness in the equities market coupled with an increasing concern for QE. There will be a pocket of time where the dollar will remain in a range as QE would weaken it (so it won't rally on fear/risk off), so it’s likely to trade within the daily triangle pattern that has formed. Fear is heightened today on the back of concerns in Spain. QE will likely not rally the Dow until it’s a more tangible reality and at that time we’ll likely see dollar weakness. That said, it’s very possible to continue to see a choppy dollar and a weak equities market. That’s exactly what will propel the USD/JPY lower in the near term.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner