You can see in the above the 4-hour chart of Japanese Yen. Recently, the price has been climbing, which means a weakening of the Yen.
Obviously, USD/JPY has almost reached its previous high, and there would be an extremely strong resistance there.
On the other hand, the red up-trend line provides an increasing support to the rate. This pushes Yen to lower and lower levels.
Now the rate is at the end. It's time for it to choose whether to break upwards or downwards. Volatility will undeniably jump.
Looking at the current situation, I would expect a further weakening of Japanese Yen; which means a boost in USD/JPY and the breakout.
The main reason is that, although there is speculation about Japanese companies buying Yen, the fundamental is not really good. The government and companies have to spend a lot on fixing the plants and buildings and houses after the earthquake and tsunami. There might be worries about whether they can, or how long they can, keep a good financial status. Such thoughts would help weaken Yen.
Anyway, I myself trust technical analysis more. What we have to do now is to wait, and see how it would go after the end of wedge. It's simple: if it breaks upwards, we buy (USD/JPY); otherwise, we sell.
Happy Fool's Day :D
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