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Stay with shorts in GBP/JPY – Deutsche Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 11, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Kit Juckes, Research Analyst at Deutsche Bank, suggests that the way USD/JPY trades -spiking lower before being dragged back up by the BOJ – means that momentum indicators like relative Strength Indicators (RSI’s) are useful tools to get a sense of when the move is going too far, or when momentum is picking up/fading.

    Key Quotes

    “When the RSI peaked and started falling at the start of this month was a very good signal to buy the yen, and on the converse, the RSI is now approaching levels last seen as we spiked down to USD/JPY 116 in January. This move in the yen may now be going dangerously quickly and when momentum slows (which is when RSIs wills top falling), it will be time to take profits on yen longs, at least temporarily. We’ll stay with shorts in GBP/JPY and longs in JPY/KRW but a turn in those RSIs will be a sign to lighten up.”
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