What’s next for the Japanese yen?

Market Pulse for April 9

Technicals

On the daily chart below you can see the chart damage caused by the BOJ’s actions.  ADX once again rose with a sharp move of DI- crossing up over DI+ with a large increase to DI Differential. Actually showing strength once again to the trend, which was dropping. Stochastics dove down from overbought territory to hit bottom in deep oversold territory and MACD crossed down below the signal line adding divergence. At this point I am not sure if the Yen will continue dropping to test 1.00000. I am thinking we could see a pullback or at least profit-taking. Bears may have pushed too hard and need to catch their breath.

Click to enlarge.

On the weekly chart, check out the spike mid-March 2011. This was caused by the earthquake and the G7 actually got involved to lower the yen. How did they do it? Look at the COT report and you will have your answer. For now we will need to see how the weakened yen has helped Japan’s exports. If more help is needed, we may see price action like we saw back in 2006 and 2007. Price action then was 80-90. But first let’s see if the yen even gets to test 1.00000. Have a prosperous week.

Have a prosperous trading week.

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