Tag Archives: ETF

Trading Strategy – CurrencyShares Japanese Yen

The dollar edged down slightly against the yen at 118.11 Monday ahead of the Bank of Japan’s two-day meeting that will end on Friday.  As such the Guggenheim CurrencyShares Japanese Yen Trust (FXY) rose 0.38% to 81.86.  In fact, a closer look at the daily chart of FXY suggests that the currency is in an early stage of a new upswing that projects to 83.35 at a minimum but has an overshoot target near 84.70.

The graphic below is from our “U.S. Market ETF Trading Map”, show the near-term technical bias and trading ranges for FXY.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red.  The yellow bars identify period of neutral or sideways trading pattern.  Additionally, the light-blue shading represents the short-term trading range.  A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading).  Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.

Chart 1.1 – Guggenheim CurrencyShares Japanese Yen Trust (daily)

As indicated in the above chart, our “U.S. Market ETF Trading Map” is looking at FXY from a Buy side.  Over the past few days, FXY has been trending lower in a short-term corrective mode as traders digested the December massive rally.  Last week’s correction tested and respected support at the 38.2% Fibonacci retracement of the December-January upswing.  That level roughly corresponds with the lower edge of the pink band.  In accordance to the Japanese candlestick recognition, Monday’s bullish engulfing bar is a clear indication of demand overwhelming supply.  Perhaps the positive Money Flow measure is the best illustration of the bulls’ case…Click here to read more.

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