USD/JPY makes move for even lower levels

ForexNewsNow | Published on October 28, 2010 at 10:11 am

Intraday analysis - a heap of Japanese yenNEW YORK (Forex News Now) – Currency market trading is an exercise in following the trend, if the trader is to be profitable in the long run. Often people will spend too much effort on trying to “find the bottom” of a market, only to be punished by the markets for their efforts.

In the USD/JPY pair, we have a clear downtrend on the daily as shown by the trend line on the chart at the end of this article.

While many traders have tried to call the bottom, and even with the Bank of Japan intervening, the pair simply cannot find any real traction no matter how low it goes. Add to that the fact that several central banks are now buying Yen, and the Fed is busy monetizing the debt, it makes sense that the pair will go lower. (The Swiss National Bank, Chinese Central Bank, and several others have mentioned that they are buying Yen in the last month or two.)

Looking at the chart, one can see that the action in currency market trading has been decidedly anti-Dollar, as shown by the clear, concise, and well-tested trend line starting back in late May. Yesterday, (as shown by the long arrow) a “shooting star” candle was formed at the top of the recent range, signaling another round of bearishness.

The bottom line shows the all-important .80 level, which has been support recently. The Bank of Japan will certainly be watching this level, but with the entire world against it, any intervention will likely be folly. A break below this line signals another round of selling pressure.

USDJPY analysis October 28

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