We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • RT @iv_technicals: Remember 2007? (via @hmeisler) https://t.co/uBcHysanRT
  • Hubei province reports 349 new coronavirus cases after guideline revisions - 108 new deaths - BBG
  • RT @TaviCosta: Ominous. FX vol just reached its lowest in 28 years. Similar levels preceded major downturns: Asian Crisis, Great Recessio…
  • $AUDUSD hovers near decade lows as coronavirus fallout batters the Australian Dollar, but the Aussie now looks to monthly employment data due Thursday, February 20 at 00:30 GMT and subsequent changes in RBA rate cut bets. Full analysis via @DailyFX below: https://www.dailyfx.com/forex/technical/home/analysis/aud-usd/2020/02/19/audusd-forecast-aussie-dollar-eyes-australian-jobs-data-rba.html
  • The #Dow Jones approaches the famed 30,000 mark as bullishness continues. Similarly, the S&P 500 nears 3,400. Get your #equity market update from @PeterHanksFX here: https://t.co/NtGl63wNf1 https://t.co/aooktssNeV
  • Precious Metals Update: #Gold 1,611,55 (-0.01%), #Aluminum 1,720.00 (-0.06%), and #Copper 5,773.00 (-0.67%) [delayed]
  • ❗Heads Up Traders❗ Will be covering the Australian jobs report in 2 hours. $AUDUSD can't quite break under support and now there is ominous positive RSI divergence. Will a better-than-expected outcome be the turning point? #AUD $AUDJPY $AUDNZD #AUDCAD - https://www.dailyfx.com/webinars/475271731?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/V8P6Q2WpPq
  • Yes, that was quite the surge in $USDJPY today. Just a reminder that using my majors-based #Yen index, the dominant uptrend is still in play via rising support from 2018. There was a break under the near-term rising trend line which may take JPY down to lows from DEC & JAN https://t.co/N2fXmKEfep
  • When carry flows trump sentiment🤷‍♂️ https://t.co/UT8ucpiCPS
  • RT @charliebilello: US High Yield and Investment Grade Bond yields are at their lowest levels in history. https://t.co/m33RggxlUf
Forex Strategy Outlook: We Like Japanese Yen and US Dollar Shorts

Forex Strategy Outlook: We Like Japanese Yen and US Dollar Shorts

2011-10-24 21:15:00
David Rodriguez, Head of Product
Share:

DailyFX Individual Currency Pair Conditions and Trading Strategy Bias

forex_strategy_trading_us_dollar_japanese_yen_body_Picture_11.png, Forex Strategy Outlook: We Like Japanese Yen and US Dollar Shorts

DailyFX+ System Trading SignalsA noteworthy bounce in volatility expectations improves chances for volatility-friendly Breakout Opportunities trades in the days ahead. The system has generally underperformed given that it has tried to buy the Japanese Yen (Sell GBPJPY, AUDJPY, EURJPY) into fairly significant weakness. It seems imprudent to go against Euro, British Pound, and Australian Dollar strength against the fast-falling Yen. Yet going with the trend (long EURJPY, GBPJPY, AUDJPY) could work well and we might take these trades.

We similarly will likely avoid long-JPY pairs as seen through Optimal Entry. The possible exception is the USDJPY, which as recently broken to fresh lows. It looks attractive to sell into USDJPY rallies as the pair may soon fall to fresh lows.

Market Conditions:

The 3-month DailyFX Volatility Index recently traded within a fairly well-defined uptrend channel, and it seems like markets are primed for further sharp moves in the weeks ahead. We like betting on further currency breakouts, but the key is to trade breakouts into the direction of the trend. We’ll be keeping an eye out for signals that go short the US Dollar and the Japanese Yen in particular.

forex_strategy_trading_us_dollar_japanese_yen_body_Picture_8.png, Forex Strategy Outlook: We Like Japanese Yen and US Dollar Shorts

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

To contact David, e-mail drodriguez@dailyfx.com

To be added to David’s e-mail distribution list for this and other reports, e-mail subject line “Distribution List” to drodriguez@dailyfx.com

Definitions

Volatility Percentile – The higher the number, the more likely we are to see strong movements in price. This number tells us where current implied volatility levels stand in relation to the past 90 days of trading. We have found that implied volatilities tend to remain very high or very low for extended periods of time. As such, it is helpful to know where the current implied volatility level stands in relation to its medium-term range.

Trend – This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near monthly lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair’s monthly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Bias – Based on the above criteria, we assign the more likely profitable strategy for any given currency pair. A highly volatile currency pair (Volatility Percentile very high) suggests that we should look to use Breakout strategies. More moderate volatility levels and strong Trend values make Momentum trades more attractive, while the lowest Vol Percentile and Trend indicator figures make Range Trading the more attractive strategy.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES IS MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. The FXCM group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance contained in the trading signals, or in any accompanying chart analyses.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.