August 29, 2018 08:28: Dollar/Yen trading strategy [from Mr. Teru Erimori’s newsletter]
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From the real trading strategy newsletter "Tetsu Emori's Real Trading Strategy" by Tetsu Emori, provided by GogoJungle, here is a small excerpt from this morning's dispatch. This time, you will see a USD/JPY trading strategy where yen selling and dollar buying are somewhat favored, with the dollar-yen trading in the low 111s.
We will keep the USD/JPY long. The situation that barely maintains around 111 yen has not changed. It is already overbought, so a correction could come at any time, but as the other currencies drop against the dollar, cross yen is rising, keeping the yen weaker. If trade and tariff negotiations progress, these elements have been sources of market uncertainty, and as a result, the dollar’s strength had persisted; if progress is seen, the dollar-selling bias could strengthen further. Moreover, if this momentum accelerates, the unwinding of previously built dollar long positions could proceed, potentially pushing the dollar down more than expected. For USD/JPY, yen-selling positions are somewhat larger, so there is also a possibility of repurchases of the yen, which could push the pair higher. In that case, watch out for a potential yen appreciation. That said, if the stock rally continues, the yen—viewed as a safe haven—might become less attractive to buy, which could limit the downside for USD/JPY. For now, it would be wise to observe the movements of other currencies carefully and respond accordingly.
“Tetsu Emori's Real Trading Strategy” (Tetsu Emori) quoted.
Presidential election-year remarks in the U.S. midterms could cause financial market turbulence, so they should continue to be monitored closely. (Editorial staff)
USD/JPY, 1-hour chart.
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