Dominic Picarda’s Technical Take
uSD/JPy The Japanese yen has been a very strong currency in recent years. During phases of global crisis, the currency has tended to attract safe-haven buyers from around the world. That’s despite the weakness of the Japanese economy, which has never recovered from the bursting of the nation’s economic bubble of the 1980s. The government has some of the heaviest debts around, while Japan is no longer selling more to the rest of the world than the world buys from it. The authorities are now deliberately seeking to undermine the yen in order to kick-start growth. The US dollar/Japanese yen rate is already in a beautiful uptrend, consisting of strong thrusting gains and gentle pullbacks. This is just the sort of trend that I like to try and trade. One drawback is that having risen some 23% since last September’s level of ¥77.09, USDJPY is very stretched on its weekly chart, with an RSI reading of 87%. Nevertheless, I would be seeking further gains going forward, with major targets at ¥94.11, ¥99.85 and ¥104.09. Bounces off the 13-day EMA make obvious entry-points.
CHART - USD/JPY
March 2013
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