The rise in US Treasuries on thoughts the Fed may need to be more restrictive on rates has been nudging the USDJPY pair higher over August. Look at the relationship between US 10 year yields and the USDJPY overlay on the chart and you can see a close correlation.
Furthermore, the seasonals are very strong for the USDJPY over the last 10 years. Between August 28 and October 31, the pair has risen 80% of the time, for an average of 2.67%. The largest move was last year with a move of 8.07%. The question now is will that seasonal pattern repeat again this year? Furthermore, the higher the USDJPY goes the more chance we have of intervention from Japan’s Ministry of Finance. Their intervention could suddenly see the USDJPY fall sharply, so that is a key risk to be aware of.
Major Trade Risks: The main risk here to be aware of is sudden USDJPY selling on Japanese intervention. Japan’s Finance Minister Suzuki said on Tuesday that they are ‘watching markets with a strong sense of urgency’. JPY traders beware as sudden USDJPY selling could be imminent.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
