USD/JPY: Headed to 85

The US dollar continued to hit new decade lows against the Japanese Yen and is inching closer to my 85 target. As you can see in the chart below, there is no support from here to 85. With US interest rates below Japanese rates, more adjustment is happening in USD/JPY.

Source: eSignal

Source: eSignal

I do not think we will see much yen strength past 85. Although the Bank of Japan will not physically interven in the currency market anytime soon, verbal intervention may be on its way.

Also, Fed fund futures suggest that we may have seen the last interest rate cut from the Federal Reserve:

Here are updates on my recent trade calls, hope you banked some of this

12.16.08 USD/JPY to 85 (bottom of article) > FLOATING PROFITS

12.16.08 EUR/USD Headed to 1.43 (bottom of article) > HIT!

12.15.08 AUD/USD Headed to 0.70 > HIT!

12.11.08 EUR/USD Headed to 1.35 >> HIT!

12.08.08 EUR/GBP Headed to 0.90 >> HIT!

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15 Comments

  1. Hi Kathy,

    first congratulations for your amazing blog, I really like it :)

    I would like to know your sentiment regarding the BoJ Interest Rate Decision on friday. Will it be rather bullish or bearish for the yen? I’m looking at the GBPJPY right now.

    Cheers!

    Reply
  2. Thank you so much Kathy. Spot on for AUD/USD! (Hurray!:)) It was a fantastic hedge for my USD trading account prior to FED. I can count 5 waves for the recent huge decline and can understand why one of your readers was asking if we can reach 0.75 (38.2% retracement).

    BTW, can you advise on the minimum amt we should preferably to execute the trades in your advisory service?

    Thanks,
    LD

    Reply
  3. Ibiza – No question that the BoJ will leave interest rates unchanged. It will prob be neutral for the yen

    LD – Glad you caught the move. You can trade any amount you want with the forex signal service because our alerts are based upon number of lots. Just make sure you have enough capital to trade at least 2 lots (either mini or large). In general $2500 is a good amount to start an FX account

    Reply
  4. hi Kathy,

    I am using Interactive Brokers IB as my trading platform. The AUD/USD requires a min purchase of 35k AUD. The selling too requires a min of 35k AUD. Is that “one lot”?

    If I trade based on that IB requirement, I would need 75K for 2 lots?

    Reply
  5. That’s pretty high. IB is typically for traders that have more money to swing around.
    Check with them though because based upon your logic, that is true, but the number is quite big.

    Reply
  6. I could add a few comments since I am with IB also.

    true the minimum purchase for AUD is 35k. But we are leveraged at 40:1 for now so to buy 35k AUD you would only need 875 AUD in fact

    Reply
  7. Jen: Just to save Kathy some time, I’ll answer for her. The signals are sent by email and posted in a chat room. They can also be recieved via SMS.

    Fwiw, I’ve been subscribing for a year or so, and will be renewing. Happy trading!

    Reply
  8. George H thank you for responding. One more question (maybe this is explained on your site somewhere) how long are the trades held for in general? few hours/minutes/days? Just trying to get a feel if possible to follow while at work.

    Reply

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