The USD is gaining strength across the board, creating trends in the forex market.
My previous article focused on the 4.5% move on the EURUSD so far this month.
Today, we are looking at the USDJPY, which has moved 21% since March (green shaded area below), showing why it is essential to have forex pairs on your global watchlist.
When the stock market is in a period of uncertainty, as it has been this year, we will often see trends in the forex and/or commodities markets. This is why scanning for opportunities across all markets is a must, as it drastically improves your portfolio performance.
Below, I have the monthly timeframe for the USDJPY.
I have highlighted the trend in play, one that has broken through multiple resistance levels (red arrows above). The price now has ample space for the USD to continue gathering momentum before encountering the next significant level of resistance, the current all-time high dating back to 1998.
If the Dollar Index, which I went into detail about in a previous article, continues to gain strength, then expect the USDJPY to follow and for the potential of new all-time highs.
I have long positions in play on the USDJPY and will be looking to add further compounds.
However, the forex market has gained a reputation for swift reversals in recent years, so I have a small risk and a well-placed stop loss. I will let that protect my downside and continue to focus on the emerging bull trend through compounding.
In the forex market, it is not uncommon to see trends last nine to twelve months, so there is still plenty of upside and profit potential.
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