December 25, 2018 08:29: USD/JPY trade strategy [from Mr. Tetsu Emori's newsletter]
GogoJungle is pleased to share a small portion from the investment newsletter “Tetsu Emori's Real Trading Strategy” by Tetsu Emori, which was distributed this morning. This time, please take a look at the trading strategy for USD/JPY that fell to the early 110s.
We will keep the USD/JPY short. It finally broke below the important support at 110.70. This makes the long-term trend clearly yen-strengthening. If we can recover this level promptly, we can buy time for the yen-strength trend, but considering the ongoing U.S.-Japan trade negotiations, a move toward yen weakness is unlikely. As I have explained before, the theory is that “the FX market moves with politics.” Without understanding this, explaining with various indicators is almost meaningless. Theoretically, FX levels can be explained by real interest rate differentials, but that is only in peacetime. In a situation like now, where international politics are highly dynamic, one cannot avoid being influenced by U.S. currency policy. Going against this will not work, and there is no point in doing so. The pressure for stronger yen is intensifying. The USD/JPY will have to go down. This is the scenario I have repeatedly pointed out.
“Tetsu Emori's Real Trading Strategy” (Tetsu Emori)Quotation from.
Emori says that USD/JPY may continue to decline toward 100. It looks like 2019 will be a high‑yen trend (Editor's note).
USD/JPY, 1-hour chart.
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