Are the stars aligned for yen weakness?

• InEgoVeritas
• November 24th, 2009

Umm, looks like we have three stars that do not look too bad. The Nikkei 225 index is now down close to an upward moving 200 dma that could very well act as a strong support area. We also have its slow stochastics in strong oversold territory. The Yen tends to be inversely correlated to the Nikkei.

Another interesting indicator which has been highly correlated with the Yen this time is the yield on 10-year US Treasury note. Here again, the 200 dma could very well act as a strong support area and the stochastics are coming back into the key “swing trade” area from being highly oversold.

And finally, the $usdjpy pair, the best barometer out there to gauge yen strength, could very well be in the process of forming a double bottom.

An interesting tri-fluence of signals that yen traders should definitely keep an eye on if you ask me.

IEV

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Tickers: 10 year Treasuries, Nikkei, USDJPY, yen

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