Saturday, May 22, 2010

Yen Thoughts

On a local train today I saw this advertisement saying "mina no FX" meaning "everyone's FX" with a cartoony looking woman, presumably a depiction of the ever-famous FX-swindling Japanese housewife. With angel wings and all.

This got me to wondering more about the Yen's big picture. After a little playing around with the daily and weekly charts for $XJY, the weekly chart below jumped out at me. Admittedly it is too busy. I have highlighted 3 advances which all have retraced 60% +/- 2-3 percent. You/I can interpret the action from Sept to March as a big head and shoulders and the pop after the "crash" earlier in the month as a test of that. This week did not exceed the pop from the "crash". While the MACD and assorted MAs look threatening for anyone doubting the Yen, I wonder if we could see it reverse and head to an overall 60-2% retrace of the whole move from $XJY 80 to 116. That would make the dollar 105-6 yen. That does not seem so outlandish. The alternative is a test of the $XJY highs and a $1 being 84-5 yen...BOJs worst nightmare, again.
Use the pics below as you meditate $XJY at 116 or 94-95.