THE NAIVE TRADER

Since my last post the USD/JPY has seen drastic change which is fascinating as ever. I didn't think we would see a drawback till the mid 114 level I must admit even though the stoch RSI was heavy on the overbought level but anyway, live and learn! So now we are again in a precarious position, looking just at technical, we have been seeing the currency pair in a solid upward trend testing the upper levels of but rebounding off the upper and lower channels through the last few months. Now once again the lower trend line looks to be tested, the reason why I think it could be tested is because the lower bounds of the Bollinger Bands haven't been touched and the market still looks in a downward progress. Yet countering this we are reaching the point in the RSI where its the bottom of the oversold section, so a rebound is expected. The opposite was seen when we hit the top in terms of what was seen in recent times over the last few months and that I why I don't think we wil...

We saw the currency pair break through the resistance fairly easily, with much less drawback than I originally expected. Buy volume still seems very solid with confidence in the Dollar clearly holding well, which is surprising as I thought markets would react to this RSI position with a drawback at least for a short while, maybe even holding a horizontal position for this week or so. However clearly not, RSI is still cooking, almost hitting the 100 mark on the indicator, showing that the market is looking strongly overbought for the current period. What is interesting though, is that even with the currency pair being strongly overbought just looking at resistance levels, I don't expect much dip until we reach the mid 114 level. This would be impressive, highlighting just how strong the US dollar is right now, as investor confidence has clearly grown over the last few months. I believe that it will hold at the level before much further gains. this bullish rally needs some tim...