March 19, 2019 08:13: Dollar/Yen trade strategy [From Mr. Tetsu Emori's newsletter]
From the real-time trading strategy newsletter “Real Trading Strategy” by Tetsu Emori, provided by GoGoJungle, here is a small excerpt from this morning’s distribution. This time, please take a look at the dollar-yen trading strategy.
We will maintain a short position on the USD/JPY. Ahead of the FOMC, there is no clear direction. The result of the FOMC will be announced in the early hours of the 21st Japan time, so it seems price action will remain subdued until then. Given how stalemated it has been, there is a possibility that the market will move significantly in response to the FOMC outcome. The basic scenario is a stronger yen/lower dollar, but we should watch cautiously. The theoretical value of USD/JPY, calculated from the real interest rate differential between Japan and the United States, is around 113.50 yen. Therefore, a move toward weaker yen (higher USD/JPY) would not be surprising. However, it seems unlikely that the Trump administration would tolerate a yen depreciation beyond 115. Past examples show that if the yen weakens, verbal intervention would likely occur. This is something to keep in mind. On the other hand, even if the price falls, in the current market environment it seems difficult to break below 110. If it were to drop to around this area, it may be wise to take profits for the time being.
‘Real Trading Strategy by Tetsu Emori’ (Tetsu Emori)quotation from
At 3:00 a.m. on the 21st in Japan time,FOMCstatements are scheduled to be released, so it seems prudent to prepare strategies that can respond to either a yen depreciation or appreciation. (Editorial staff)
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