News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
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
Oil - US Crude
Bearish
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
Wall Street
Bearish
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
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Why is JPY called a safe haven? What are some factors in its favor this quarter? Get your free forecast here: https://t.co/mzeJ5x73N3 #DailyFXGuides https://t.co/S4bwgGZxmw
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/T3W8CIg5iy
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/FPgZ5gkgrM
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/E0KhcKHrOf
  • For some reason an old story has popped up - many apologies.... https://t.co/jHjQxyFRXM
  • The US dollar is unloved, oversold and at lows last seen over 30-months ago. At the moment there seems to be very little reason to buy the greenback. Get your $USD market update from @nickcawley1 here:https://t.co/VY3SLs35cp https://t.co/w5ljByv9cf
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/CpqePQYF4E
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/Rg2YGZCUCr
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/ftrbRkFiJF
  • Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Learn about the top ten trading mistakes and how you can avoid them here: https://t.co/i8E2AXtzF3 https://t.co/Hny2HMYo4I
US Dollar/Japanese Yen Likely to Offer Better Long Entries Lower

US Dollar/Japanese Yen Likely to Offer Better Long Entries Lower

2012-04-24 16:30:00
David Rodriguez, Head of Product

The US Dollar (ticker: USDOLLAR) may have set a long-term bottom against the Japanese Yen, but recent weakness in US Treasury Yields suggests the USDJPY may trade lower and offer better long opportunities in weeks ahead.

The US 10-year Treasury Yield may have set a long-term bottom as the USDJPY likewise hit important lows, but more recent weakness suggests that the highly-correlated Yen pair could trade lower. The short-term link between Treasuries and the USDJPY trades near record-strength, and it remains critical to watch the US Federal Reserve’s next moves as any shifts in rhetoric could have a profound effect on interest rates.

Forex Correlations Summary

View forex correlations to the SPDR Gold ETF Trust (GLD), United States Oil Fund ETF (USO), SPDR Dow Jones Industrial Average ETF Trust (DIA), UK FTSE 100 Index, and IShares Silver Trust ETF (SLV) prices.

GLD

EURUSD

GBPUSD

USDJPY

AUDUSD

USDCAD

NZDUSD

USDOLLAR

1 Week

0.57

-0.48

-0.18

0.48

-0.08

0.74

-0.47

1 Month

0.60

0.54

-0.15

0.67

-0.46

0.61

-0.71

3 Month

0.49

0.22

-0.19

0.45

-0.19

0.42

-0.52

1 Year

0.19

0.18

-0.15

0.27

-0.19

0.25

-0.29

USO

EURUSD

GBPUSD

USDJPY

AUDUSD

USDCAD

NZDUSD

USDOLLAR

1 Week

0.52

-0.24

0.05

0.89

-0.68

0.90

-0.60

1 Month

0.38

0.19

0.07

0.73

-0.64

0.69

-0.46

3 Month

0.39

0.36

0.21

0.54

-0.51

0.51

-0.39

1 Year

0.49

0.37

0.02

0.63

-0.61

0.56

-0.53

DIA

EURUSD

GBPUSD

USDJPY

AUDUSD

USDCAD

NZDUSD

USDOLLAR

1 Week

0.24

-0.15

0.34

0.83

-0.87

0.66

-0.32

1 Month

0.61

0.53

0.28

0.76

-0.80

0.77

-0.57

3 Month

0.41

0.44

0.34

0.64

-0.72

0.55

-0.39

1 Year

0.64

0.54

-0.07

0.80

-0.82

0.76

-0.69

FTSE100

EURUSD

GBPUSD

USDJPY

AUDUSD

USDCAD

NZDUSD

USDOLLAR

1 Week

0.46

0.09

0.63

0.84

-0.60

0.65

-0.34

1 Month

0.54

0.41

0.27

0.78

-0.75

0.77

-0.51

3 Month

0.38

0.39

0.26

0.65

-0.69

0.62

-0.39

1 Year

0.45

0.37

-0.03

0.70

-0.67

0.65

-0.56

SLV

EURUSD

GBPUSD

USDJPY

AUDUSD

USDCAD

NZDUSD

USDOLLAR

1 Week

0.56

0.13

0.73

0.64

-0.19

0.53

-0.24

1 Month

0.60

0.47

0.00

0.74

-0.65

0.67

-0.66

3 Month

0.57

0.36

-0.12

0.61

-0.45

0.56

-0.61

1 Year

0.33

0.29

-0.08

0.41

-0.37

0.38

-0.40

Perfect Positive Correlation:

1.00

Perfect Negative Correlation:

-1.00

us_dollar_japanese_yen_buying_opportunities_forecast_fed_body_Picture_1.png, US Dollar/Japanese Yen Likely to Offer Better Long Entries Lower

US Dollar/Japanese Yen Exchange Rate (lhs)

US 10-Year Treasury Note Yield (rhs)

Correlation between US Dollar/Japanese Yen and US 2-Year Treasury Note Yield

The US Dollar (ticker: USDOLLAR) remains closely linked to US Treasury Yields, and that correlation is nowhere stronger than the US Dollar/Japanese Yen exchange rate. In fact we argued that a major bottom in US Treasury yields pointed to a similar bottom in the USDJPY.

Yet more recent price action in Treasury Yields limits optimism for near-term USDJPY gains. The 10-year Note Yield has fallen steadily below the psychologically significant 2.00% mark, and it likewise trades below its 50, 100, and 200-day Simple Moving Averages as of last week.

It is difficult to call for further USDJPY strength given weakness in yields; there is a long-standing fundamental relationship between the Japanese Yen and global interest rates. Given nearly 20 years of domestic interest rates near zero percent, Japanese investors are among the most yield-sensitive in the world. If US bond yields fall relative to those available in Japan, investments in the United States become less attractive.

We will continue to watch US Treasuries and their relationship to the USDJPY going forward. It may take a noteworthy jump in Treasury yields to force the USDJPY higher. Viewed in this light, the US Federal Reserve’s guidance on interest rates may prove critical to the trajectory and forecasts for the US Dollar/Japanese Yen pair.

--- 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

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

DISCLOSURES