Trade FOREX with FXCM

  • Award-Winning Platform
  • 24/7 Customer Support
  • Trade Directly on Charts
  • Free $50K Practice Account

Resources

US Dollar Forecast to Test Lows versus Yen

By , Quantitative Strategist
12 April 2012 15:50 GMT
ssi_usd-jpy_body_Picture_4.png, US Dollar Forecast to Test Lows versus Yen

USDJPY – In the last several weeks, retail trading crowds have aggressively bought into US Dollar (ticker: USDOLLAR) weakness against the resurgent Japanese Yen. The important shift in sentiment has given us little choice but to call for short-term USDJPY declines, and indeed a current Speculative Sentiment Index ratio of 3.72 to 1 tells us that one-sided sentiment favors further weakness.

Yet we stand by our original calls made through mid-March when we claimed that the USDJPY set an important long-term bottom. Is now a great time to buy into weakness? Our SSI suggests we could see further short-term downside, so better opportunities may arise. Yet a hold of significant congestion levels in the ¥79.60-¥80.00 zone favors longer-term strength. A break lower? We can’t rule out a return near all-time lows near ¥76.

How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the SSI via e-mail and other reports from author David Rodríguez, e-mail subject line “Distribution List” to drodriguez@dailyfx.com; Contact David via Twitter at http://www.twitter.com/DRodriguezFX

provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from

12 April 2012 15:50 GMT