About time the YEN reversed?
Fundamentals
Japanese governor Haruhiko Kuroda has been on a mission to boost the Japanese economy from deflation, and was doing really well until 2014, when oil began to slump, which dragged on the growth of the Japanese economy.
Inflation has since sunk to near 0%. Kuroda began introducing heavy stimulus measures to weaken the currency and boost inflation to bring it closer to the long-term 2% target. The stimulus didn’t work, so he introduced more, to the point where 70% of Japanese bonds now return negative yields.
Since then the yen has continued to appreciate ridiculous levels, and is probably way overbought and due a turnaround, especially given that further stimulus is likely in May.
Technicals
Technicals must be considered to support this trade and to accompany good timing. As for this, now is just the right time. The market has hit an extremely strong level of support, which we have already seen 3 hit points against (indicated by the horizontal black line).
There is also relatively strong RSI bullish divergence, as shown.
An exit point is based on a nice area of structure, as indicated by the upper horizontal line.
I think that the JPY is long overdue a turnaround, and I am buying the USDJPY pair now due to the strong fundamental analysis coupled with a few technical indicators.
Japanese governor Haruhiko Kuroda has been on a mission to boost the Japanese economy from deflation, and was doing really well until 2014, when oil began to slump, which dragged on the growth of the Japanese economy.
Inflation has since sunk to near 0%. Kuroda began introducing heavy stimulus measures to weaken the currency and boost inflation to bring it closer to the long-term 2% target. The stimulus didn’t work, so he introduced more, to the point where 70% of Japanese bonds now return negative yields.
Since then the yen has continued to appreciate ridiculous levels, and is probably way overbought and due a turnaround, especially given that further stimulus is likely in May.
Technicals
Technicals must be considered to support this trade and to accompany good timing. As for this, now is just the right time. The market has hit an extremely strong level of support, which we have already seen 3 hit points against (indicated by the horizontal black line).
There is also relatively strong RSI bullish divergence, as shown.
An exit point is based on a nice area of structure, as indicated by the upper horizontal line.
I think that the JPY is long overdue a turnaround, and I am buying the USDJPY pair now due to the strong fundamental analysis coupled with a few technical indicators.
Disclaimer
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