The yen is near a major breakdow level. The 40-year downtrend resistance line on USDJPY is around 118 currently. A move across 125 would herald an incredible depreciation that could take USDJPY to 175 or higher.
The bullish case for a yen breakdown is the 2000s. The yen was more volatile than the U.S. dollar. When the dollar was weak, the yen was weaker. When the dollar strong, the yen was stronger. The bear case is the U.S. dollar is about to rise against everything and the weaker yen will force exporting countries into similar devaluations. Or another angle I've discussed before, is that yen, yuan, won and euro are all energy importing currencies and the dollar isn't anymore, which totally changes the mix.
EURJPY was the cross to trade. It has also been a signal with respect to recent economic cycles. You can see the tops in 2008 and 2014 tagging resistance. The top in January 2018 was a lower high, and commodities made a lower high. The May 2021 peak broke resistance and was a higher high for commodities, but is this going to be a sustained breakout or a fakeout? Commodities may hinge on it. Finally, the euro-franc cross. There is a H&S pattern completed. It points to a new high for the franc between €1.05 and €1.10.
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