By: Tim LuCarelli
Market: USD/JPY - Forex
Session Date: December 14, 2012
Buy or Sell: Buy
Range: Current Price
Chart: Weekly chart of the USD/JPY with Stochastics set at 12-3-3
There is an old saying in the investment world, "don't fight the tape". In the situation with the Dollar Yen that is exactly true. Once it starts, it moves and it is moving. This week, today's session should close above 84.19 making the highest weekly close since April 2011.
On the weekly chart above I have marked a few key points. First the down trend that lasted over 5 years, then a major consolidation at the lows that lasted for 8 months, followed by a very strong breakout. Finally, in the third week of September this year, a test of the lows. What an absolutely textbook bottoming pattern.
I hate to buy into such a strong rally, but this market is reliable and still has a lot of room to move higher. Sticking with the tape and entering more here with a trailing stop of 125 pips. For the longs entered on 12-7-12 session at 82.496 I am canceling the stop at 80.85 and setting a trailing stop of 100 pips.
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