Magazine article Modern Trader

Tech Talk: The Rising Sun

Magazine article Modern Trader

Tech Talk: The Rising Sun

Article excerpt

The Japanese yen recently has awakened from its seven-month slumber below the 80-handle after making fresh post-World-War-II lows at 75.50 in 2011. The USD/JPY held below a long-standing trendline dating back to the July 2007 highs above 123 before finally breaching this barrier in early February. The move suggests that a significant low may have been put in place and the outlook is now weighted to the topside.

Year-to-date the yen has fallen more than 5.7% against the greenback as improving dollar prospects, the re-emergence of the carry trade in late 2011 and continued concerns about further currency interventions from the Japanese Finance Ministry put on downside pressure. The breach of a four-and-a-half-year-long trendline is girded by other key technical factors that support our bias. The yen's rally in February was the largest since December 2009 with the 20-day rate of change as of March 2 at its highest level since February 2009. …

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