Wednesday, June 13, 2007

Japanese Yen Making 4 Year Lows



The Japanese yen was lower today making not only a new year low but a four year low. If you look at the above weekly chart of the yen, you will see it is breaking down out of a pattern which is known as a descending triangle. This price formation is very bearish and suggests much lower prices are in the future for this currency.

3 comments:

Yaser Anwar said...

Kevin-

Nice chart. The carry will keep the Yen in a downward trend, but I think short-term we may see a bounce. The recent news out of JPY has been strong, and JGB yields have inched upwards of 1%..so we might see a bounce to 84-85 level.

Let's see, vital data in US today/tomorrow. Y

sward said...

Kevin,

Many thanks for your interesting blog.

Have you found triangle break-outs to be reliable signals in forex markets? Could the formation be labelled a falling wedge instead?

Thanks again,

Simon

Kevin said...

Hi Simon,

Triangle formations are usually reliable in most markets, but nothing is perfect.

I wouldn't call this a falling wedge, I think it's a descending triangle because of the lower highs and the horizontal base of support that was just broken.