22 Jul 2013
Yen futures rallying despite Japanese election. Is a short-term bottom in place at 0.9916?
FXstreet.com (Barcelona) - If the reaction to the Sunday’s Japanese election news means anything, then a short-term low for the Japanese currency futures (JY) may be in place at 0.9916.
When counter-intuitive moves happen, traders take notice
A key pivot low can be put in place when a stock turns around and rallies after a horrible earnings report. Or, in this case, a key pivot low may be in the process of being made as JY futures have decided to rally despite the pro-Abe election results. The thinking going into the election was that a pro-Abe vote would further embolden the Japanese leader to move forward with his mission to ignite his economy with his hyper-easing monetary policies. The fact that JY is up on Monday may be the same type of traders’ “tell” as a stock rallying after bad news.
Tech outlook for JY
While more evidence is clearly needed on whether a short-term bottom has been made, some technicians are actually calling for an eventual meaningful counter-trend rally to occur in the Yen. Tim Thielen, CMT, the author of the Sea Change Report, is calling for a move up to 1.0751 for JY. However, he notes that extreme support for the recent down move is 0.9851. Short-term resistance for JY comes in at the 7/16 high of 1.0116 followed by the 7/11 high of 1.0184. Short-term support for JY comes in at Friday’s low of 0.9916 and is followed by Thielen’s extreme “correction support” at 0.9851.
When counter-intuitive moves happen, traders take notice
A key pivot low can be put in place when a stock turns around and rallies after a horrible earnings report. Or, in this case, a key pivot low may be in the process of being made as JY futures have decided to rally despite the pro-Abe election results. The thinking going into the election was that a pro-Abe vote would further embolden the Japanese leader to move forward with his mission to ignite his economy with his hyper-easing monetary policies. The fact that JY is up on Monday may be the same type of traders’ “tell” as a stock rallying after bad news.
Tech outlook for JY
While more evidence is clearly needed on whether a short-term bottom has been made, some technicians are actually calling for an eventual meaningful counter-trend rally to occur in the Yen. Tim Thielen, CMT, the author of the Sea Change Report, is calling for a move up to 1.0751 for JY. However, he notes that extreme support for the recent down move is 0.9851. Short-term resistance for JY comes in at the 7/16 high of 1.0116 followed by the 7/11 high of 1.0184. Short-term support for JY comes in at Friday’s low of 0.9916 and is followed by Thielen’s extreme “correction support” at 0.9851.