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Japanese Yen: Trading Signals Forecast Gains vs. Euro, US Dollar, British Pound

Monday, 15 September 2008 19:35:56 GMT

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Written by David Rodriguez, Quantitative Analyst
Our Forex Buy/Sell Trading Signals forecast Japanese Yen gains against the US Dollar, British Pound, and euro through upcoming currency trading. Such trading signals come from our “Breakout” and “Momentum” trading systems, and we forecast that these trade ideas will likely perform well during current extraordinarily volatile market conditions.

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Current levels of financial market distress clearly boost forex market volatility, and the Japanese Yen tends to appreciate under such market conditions. Traders use different tools to gauge the level of distress in credit markets, and one such tool is measuring the difference between US Treasury Bill yields and their equivalent money market rate.

According to data provided by Bloomberg News, the difference between 3-Month Treasury Bills and the reference 3-Month US dollar LIBOR rate currently stands at its worst levels since the Bear Stearns-linked financial market volatility seen through March. At that point we saw carry trade pairs such as the AUDJPY lose substantially on financial market distress, and this time may be no different if credit markets continue to deteriorate through short-term trading.  

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See more Forex Buy/Sell Signals on DailyFX+ and be sure to monitor any updates on these specific signals, as our automated forex signals can and do change on a daily and intraday basis.
For more information and guides on using our DailyFX Buy/Sell Signals, see our Weekly Forex Trading Strategy Outlook report.
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