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.
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3 comments:
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
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
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.
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