THE DOT - if this turns orange or red be alert

Monday, December 7, 2009

USDYEN update

The Yen has been rising sharply in the last months but rather for the wrong reasons as I thought it would as a part of deleveraging. Instead the yen short has been swapped into a Dollar short.
Lets look at the technical picture which has a very obvious message - we broke out of a 10 year descending wedge which gives a target of 40 points down. We can count from 102 and get a target of 62 but the time frame is again 10 years. The retest of the 80 low of 1995 is mandatory and should be seen within 3-6 months but right now we might see a retracement to the 95/7 area but 92.5 is rather the likely target for this move. The dollar we see a final wave of weakness in 2010 testing all the old highs / lows as weaker US data in early 2010 will kill the early FED interest raise option. After Jan 2010 all the rosy greenshot myth will vanish and replaced by tough realities that no one is out of the woods yet.

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I am a professional independent trader