We've been making the bear case for the Yen for some time now -- see our Japan archive, and our Guide to the Japanese Debt Crisis. Over the past three weeks -- since March 11 to be precise -- the Yen has been strengthening. Which begs the question: when will be a good time for Yen bears to speculate on the resumption of a downwards trend? Or is a larger move to the downside still to come?

Consider the chart below of AUD/JPY, my favorite Yen pair to trade. Unfortunately some life events got in the way and I was not able to watch the markets as closely as I would have liked (perhaps I should have setup an alert -- I still need to fine tune the logistics of how I monitor markets), as I would have liked to enter in the green area highlighted below. That area is near the 50% Fibonacci level of the move from 93.25 to 99.75 (February 26 to March 11), which is denoted by the dashed gray line on the chart below. The shaded green area also coincides with a horizontal support level.

If the market can re-test that level, I'd be inclined to enter.

Over on the USDJPY daily chart, we see price forming a hammer right around the 50 moving average.

I'm focused on AUDJPY, although if I was trading USDJPY, I'd prefer to see a test of 92 before considering an entry.

What do you think about trading the yen at the current moment?

By Simit Patel
http://www.informedtrades.com

InformedTrades is an online community dedicated to helping individuals learn to trade the world's financial markets. Members earn prizes for sharing their knowledge, and the best contributions are compiled into InformedTrades University, the largest collection of free organized
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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