Japanes Yen- The Big Picture
Above is a weekly chart of the Japanese Yen and as you can see this currency has been in an uptrend since the summer of 2007. If you draw a trendline connecting the lows, you'll notice that the Yen appears to be breaking this trendline for the first time.
What I usually like to see is 2 consecutive closes below this trendline to confirm that the uptrend has indeed been broken. Being that this is a weekly chart, I would need to see two weekly closes below this line in order for the long-term uptrend to be be broken in my opinion.
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5 comments:
In my opinion, so long as the previous low has been taken out, you are safe to short it when it rallies up to previous support turned resistance level. Since Yen's previous low has been taken out, i will target for 100. At 100, this is a major support level and i would take my profit there and sit out and reassess the situation again.
I'm surprised that you often use just two point to draw a trendline. As any two points make a line, there are always dozens of lines that can be drawn off a chart if using only two points. Every significant low (or high) can be connected to something! Your recent line for the yen is an example. Do you always connect two significant lows and consider that a valid trendline?
DG
Using a minimum of 2 points is perfectly fine providing that these points are major turning points. The trendline that I drew has been in force for a few years, don't ya think that might be significant?
And the Yen has an inverse correlation with the US markets, right?
How do you reconcile the risk that equity might reverse quite soon? If that happens, isn't Yen gonna strenghthen?
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