Yen On Course To Head Much Lower In 2013

The Yen is still in a corrective stage and as it’s oversold could experience a rally that could last for one to several weeks before it resumes its correction. There are signs now that it will or should test the 118.00 ranges.   A test of the 118 ranges will most likely result in a much stronger rally as there is a lot of support in this zone. This relief rally, though strong will fail and eventually 118 will be taken out.    Unless the Yen generates a buy signal (and there is no sign of one yet) it should test the 118.00-118.90 ranges.   Market update Nov 27, 2012

 To indicate that a bottom is in place the Yen should not close below 118.08.  A close below this level will indicate that it is ready to test the April 2011 lows.   Market update Dec 23. 2012

The Yen was unable to hold the above 118.08 and went to cut right through right through its April 2011 lows.  The daily sell signal has shown no signs of letting up, so we are going to modify our exit instructions.     The Yen appears to be ready to test the 110 ranges.  Therefore, when FXY trades down to the 110 ranges put in orders to close out all positions in YCS.  This outlook will remain valid unless a new buy signal is triggered.

As stated in the last update, once the Yen signals that a tradable bottom is in place. We will be looking to open up positions in FXY.  However, for now, the outlook is still negative on the Yen, and we feel it will remain so.  While there Yen can and should experience some strong counter rallies, the long-term outlook for the yen remains unchanged. The Yen is expected to put in a series of Multi Year lows.

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