Japanese Yen Holds Critical Lows but not Likely For Long
Trade Implications – EURJPY: Our purely sentiment-based Momentum2 system boasted substantial gains trading the EURJPY and other Yen pairs through the beginning of the month, but the strategy has since flipped directly on the EURJPY and suffered losses through sideways price action. Past performance is not indicative of future results, but Momentum2 has historically been one of our most streak-prone trading strategies: it tends to do very well or very poorly for weeks and months at a time.
Our trading strategy biases have been heavily overweight Japanese Yen given that the SSI-based Momentum2 and Breakout2 systems have done very well trading it amidst massive volatility. We remain overweight these strategies (and bearish JPY, bullish EURJPY), but it’s critical to note that a highly-anticipated Bank of Japan interest rate decision could force significant swings across Yen pairs.
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.
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.