Sunday, August 3, 2008

USD/JPY

while I here at Trend and Value still maintain a generally bullish outlook on the Dollar, the last week or so I've become open to the possibility that the decline in the nippy versus the US currency may be set to reverse somewhat. I'm not totally convinced about it, but still I must say that I don't view the continued strength in the USD/JPY rate as such the 'sure thing' I did a week or two ago. here's a weekly chart of the nippy on the futures market:




this being a futures chart, it's the inverse of what we trade on our forex platforms, sorry for the confusion. but anyways, the nippy has given back precisely half of its gains from last summer to this spring, and has touched some key moving averages. if the nippy holds last week's lows while the other major currencies continue to drop lower, that could signal a fairly substantial rebound for the nippy and serve as a further indication that a deflationary dynamic is developing.


UPDATE (8/6/08 9:10 PM): so the Dollar surged against the nippy after all. that'll teach me to keep my mouth shut.