Monday, August 30, 2010

USD/JPY falls to 15 year low, a strong BUY signal?

The bank of Japan (BOJ) may intervene soon to fix its currency to increase exports again. On September 6th they will determine whether or not it's wise to do something about the stronger getting Yen. Will this be too late since already companies like Nissan are seeking their business elsewhere? As far as I see, Japan's in trouble. Even if the BOJ intervenes it may not be the solution to their problems. Already companies are leaving Japan, that relies so heavily on exports. However, in the short term government intervention could boost the index a few hundred pips higher. As you can see on the chart above I didn't include any technical indicators since this trade solely relies on a  fundamental outlook. These figures are historical these days. I remember a year back there was talk about the USD/JPY breaking through 100.00! With so many major companies in Japan, like Sony and all the Japanese makers relying on exports it's hard to believe these exchange rates are staying where they are now. I foresee a major boost, bringing it above the 90 mark again, which would conclude a profit around 600 pips and beyond. So whether or not this pair is a buy I say absolutely. I just watched Bloomberg TV that is following analysts that are keeping a close eye on this pair buying at 83.60, I agree with them. I'm buying around 84.00, with a stop loss of 25-30 pips and a profit target of 100-125 pips and beyond! Depending on the velocity of the trade, I might even hold out longer! A strong buy!

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All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.