Skip to Content
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. See our updated Privacy Policy here.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
USD/JPY: Just a Bounce or a Bona Fide Pain Trade?

USD/JPY: Just a Bounce or a Bona Fide Pain Trade?

Kristian Kerr, Sr. Currency Strategist

Price & Time covers key technical themes daily and can be delivered to your inbox each morning by joining the distribution list: Price & Time

Talking Points

  • USD/JPY rebound picking up steam
  • Latter half of next week critical from a timing perspective

USD/JPY: Just a Bounce or a Bona Fide Pain Trade?

Next week is looking very interesting for global markets as the S&P 500, Crude, Nikkei, Yen and a few others will be facing some key timing hurdles. My focus will be primarily on Japan given the convergence of timing relationships around the Bank of Japan decision, but I suspect we will learn a lot about the true state of the markets by the way they react these next few days. In other words, whether this recovery is the real deal or not.

Looking for real-time forex market sentiment? Get it HERE

USD/JPY is perhaps the most interesting instrument to watch given that in addition to some important Fibonacci timing relationships next week it will also be 3,141 calendar days from the key cyclical high recorded in June of 2007. The Martin Armstrong Pi cycle is one of my favorite timing techniques and when it coincides with other unrelated timing methodologies, it is usually worth paying a little extra attention. As for direction, a lot depends on what USD/JPY is doing into the latter part of next week. A continuation of this current rally would open the door to some sort of secondary high especially if we get near square root relationships around 119.20 and 120.25. A turn down before then to re-test or even break support around 116.00 would have me looking for a more formidable low. A failure to respond to the timing relationship is another possibility (like the pound last week), but we will cross that bridge if we get there. I slightly favor my first scenario as futures positioning shows the market has its biggest yen long position on in over three years. Momentum usually loves the pain trade.

--- Written by Kristian Kerr, Senior Currency Strategist for

To contact Kristian, e-mail Follow me on Twitter @KKerrFX

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