Japanese Yen Meltdown Produces Banner Week for Trading Strategies
Trade Implications – EURJPY: Last week we wrote that our purely sentiment-based Momentum2 system was first to go short JPY and long USD from ¥95.60, EUR at ¥121.38, AUD from ¥99.32, and CHF at ¥101.25. We’ll admit that we were nervous switching direction so rapidly, but the subsequent surge in JPY cross rates has made for one of the best 7 days of performance in Momentum2 and our volatility-friendly Breakout2 system in recent memory.
Given that market volatility expectations remain elevated for the JPY and relative yields favor further weakness, we see little reason to shift from our USDJPY and EURJPY-bullish trading biases.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
Download all of our Sentiment-based trading strategies free via an ongoing promo on FXCMApps.com
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
New to FX markets? Learn more in our video trading guide.
Contact David via
Twitter at http://www.twitter.com/DRodriguezFX
Facebook at http://www.Facebook.com/DRodriguezFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.