• 518 days Will The ECB Continue To Hike Rates?
  • 519 days Forbes: Aramco Remains Largest Company In The Middle East
  • 520 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 920 days Could Crypto Overtake Traditional Investment?
  • 925 days Americans Still Quitting Jobs At Record Pace
  • 927 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 930 days Is The Dollar Too Strong?
  • 930 days Big Tech Disappoints Investors on Earnings Calls
  • 931 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 933 days China Is Quietly Trying To Distance Itself From Russia
  • 933 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 937 days Crypto Investors Won Big In 2021
  • 937 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 938 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 940 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 941 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 944 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 945 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 945 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 947 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Trading On The Mark

Trading On The Mark

Trading On The Mark

Our work is grounded in several technical methods. We make use of Elliott Wave, Gann techniques, Fibonacci relationships in price and time, cycles, and other…

Contact Author

  1. Home
  2. Markets
  3. Other

It's Time To Start Watching for the Next Yen Setup

The Japanese Yen has been on a tear downward since 2011, and the challenge for swing traders has been to find the safe entry points and optimal exit points to ride that trend. This article is intended to help identify those points for 2014 and beyond.

By the time we started writing publicly about the Yen, price had already traced much of the enormous "3rd of a 3rd" wave of 2012-2013. In January 2013, we encouraged our readers who had been riding the short trade to take profits at two target levels. Then we advised waiting for the next shorting opportunity to set up. Now we find ourselves suggesting a similar strategy going forward from January 2014. (A recap of our coverage of the Yen in 2013 can be found here.)

The trade we've been watching in recent months began at the completion of the triangle wave [iv] shown on the monthly chart below. We believe price is currently falling in wave [v] as part of the larger wave 3. Since price has reached the first of our price targets (shown later on the weekly chart), the safe approach for any traders who are short would be to tighten stops and take at least partial profits. However, it is still possible that wave [v] could extend lower - perhaps to $0.009083 (or ¥110.10 for those accustomed to the inverse quote).

Yen Futures Monthly

In this environment, attempting a swing trade to the long side is a very aggressive trade, and we don't believe there is enough technical evidence to support trying it at this price level. It's quite possible that price may bounce from the current area, but the risk of it not doing so is substantial. The better approach for the swing trader is probably to wait for the next short set-up, which may occur after one or two upward corrections. On the monthly chart, potential short-trade opportunities correspond to the expected moves from the end of the predicted corrective wave [a] down in wave [b] and later from the end of the large corrective pattern 4 down in wave 5. The placement of the terminal points on the monthly chart is guided in part by the empirical 11-month cycle that can be gleaned from price data.

The weekly chart below shows two outstanding price targets coming out of the triangle. Wave [v] may extend to the lower target, but it does not have to. Also note that cyclical influence will start pointing upward, beginning in the first quarter of 2014. The cycle shown on the weekly chart has a period of 47 weeks.

Yen Futures Weekly

 


For a daily chart and a detailed examination of the move out of the triangle, please see the extended version of this article available at our website. The daily price action makes it clearer that the present downward wave can extend.

 

Back to homepage

Leave a comment

Leave a comment