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Currency Markets: US Dollar Index Facing Further Downside
The yen is turning higher, which could be the start of a big move up.
Cody Tafel    

The US Dollar Index has failed just below the 200-day moving average and is now breaking back below the psychological 80 level today. It now looks like the US Dollar Index is tracing out a head-and-shoulders pattern over the past 18 months; a close below the 79 level would open the door lower to a target projection of 73. So there's clearly further downside here for the US dollar, and rallies should be sold.


Click to enlarge

The Japanese yen is turning higher from the support levels I cited last week, and I think this could just be the start of a big move higher for the yen and an unwind of carry trades. The Nikkei 225 Index (INDEXNIKKEI:NI225) has already broken back below the 200-day moving average, and I believe the Japanese yen is not far behind. As I mentioned last week, this has been an easy market to short, and it sure seems like everyone is still on the short side. That usually doesn't end well. I think will add fuel to this Japanese yen rally fire!


Click to enlarge

The Canadian dollar didn't fail at resistance like I thought it would, and therefore I have been stopped out of this trade. It still doesn't act well relative to other major currencies against the US dollar, but risk management must prevail; I'll head to the sidelines for now. Just sharing the process, and hopefully we'll find some more interesting currency setups in the months ahead -- it seems like volatility is creeping back into the markets. Good luck out there....


Click to enlarge
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Author holds position in MJY futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Currency Markets: US Dollar Index Facing Further Downside
The yen is turning higher, which could be the start of a big move up.
Cody Tafel    

The US Dollar Index has failed just below the 200-day moving average and is now breaking back below the psychological 80 level today. It now looks like the US Dollar Index is tracing out a head-and-shoulders pattern over the past 18 months; a close below the 79 level would open the door lower to a target projection of 73. So there's clearly further downside here for the US dollar, and rallies should be sold.


Click to enlarge

The Japanese yen is turning higher from the support levels I cited last week, and I think this could just be the start of a big move higher for the yen and an unwind of carry trades. The Nikkei 225 Index (INDEXNIKKEI:NI225) has already broken back below the 200-day moving average, and I believe the Japanese yen is not far behind. As I mentioned last week, this has been an easy market to short, and it sure seems like everyone is still on the short side. That usually doesn't end well. I think will add fuel to this Japanese yen rally fire!


Click to enlarge

The Canadian dollar didn't fail at resistance like I thought it would, and therefore I have been stopped out of this trade. It still doesn't act well relative to other major currencies against the US dollar, but risk management must prevail; I'll head to the sidelines for now. Just sharing the process, and hopefully we'll find some more interesting currency setups in the months ahead -- it seems like volatility is creeping back into the markets. Good luck out there....


Click to enlarge
< Previous
  • 1
Next >
Author holds position in MJY futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Currency Markets: US Dollar Index Facing Further Downside
The yen is turning higher, which could be the start of a big move up.
Cody Tafel    

The US Dollar Index has failed just below the 200-day moving average and is now breaking back below the psychological 80 level today. It now looks like the US Dollar Index is tracing out a head-and-shoulders pattern over the past 18 months; a close below the 79 level would open the door lower to a target projection of 73. So there's clearly further downside here for the US dollar, and rallies should be sold.


Click to enlarge

The Japanese yen is turning higher from the support levels I cited last week, and I think this could just be the start of a big move higher for the yen and an unwind of carry trades. The Nikkei 225 Index (INDEXNIKKEI:NI225) has already broken back below the 200-day moving average, and I believe the Japanese yen is not far behind. As I mentioned last week, this has been an easy market to short, and it sure seems like everyone is still on the short side. That usually doesn't end well. I think will add fuel to this Japanese yen rally fire!


Click to enlarge

The Canadian dollar didn't fail at resistance like I thought it would, and therefore I have been stopped out of this trade. It still doesn't act well relative to other major currencies against the US dollar, but risk management must prevail; I'll head to the sidelines for now. Just sharing the process, and hopefully we'll find some more interesting currency setups in the months ahead -- it seems like volatility is creeping back into the markets. Good luck out there....


Click to enlarge
< Previous
  • 1
Next >
Author holds position in MJY futures.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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