Currency misinformation. JPY, CHF

As you have heard, ad infinitum, and with great emphasis and wailing, The dollar is being weakened — deliberately –in a plot to lower the costs of US exports — as well as  avoiding deflation.  The problem is that the charts show the dollar strengthening against the Yen and against the Swiss franc.

We see examples of such misinformation so often that when we hear the media nattering we immediately run to the charts expecting to find them lying.  And we often do.  In the Japanese Yen the long term trendline has been broken which is a buy signal for the dollar against the yen.  As a negative indicator Kiplinger’s magazine has just identified the Japanese yen ETF  (FXY) as a best buy.  Not.

In the Swiss franc we appear to have a double bottom, with a breakout above the neckline as well as a broken long term trendline.   As always, even with engraved signals take the nearest wave low and calibrate your stop to your risk appetite.

Remember the banks and currency elephants will not do you any favors here.  They will come looking for you before the market runs — with days of 2.59 length in the Yen and similar downdrafts in the franc — up to 3.0 + runs over three days.

Remember, you can observe Basing Points and trendlines on hourly charts.

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This Post Has One Comment

  1. alain

    I found Bassetti’s basing point system to be the solution to the forex markets (and many other markets too). It prevents from over analysis and paralysis!

    Alain

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