Yen/Dollar: An Update

By Jake Bernstein

Yen/Dollar: An Update

by Jake Bernstein, FSC Board Member

rulesbasedtrader@gmail.com

© 2024

Cycles in economic data are not perfect or symmetrical. I use other tools to confirm cyclical turns. We also know that, given the rules of effective and consistent risk management, cyclical market behavior can and should occupy a key role in the management and/or trading of financial assets.

To use cycles effectively you need a trigger to confirm a top or bottom. Most often these are referred to as timing indicators. Shown below (Figure 1) is the chart I showed in a past article. It indicates my expectation of a cyclical low. Figure 2 (below) shows the current chart along with one of my timing indicators.)

Fig. 1: Approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar

Status

My long-term forecast in the Japanese yen versus U.S. dollar index futures is currently of continued interest, not only pragmatically but intellectually as well. Figure 1 is the approximate 8- to 9-year (average 8.17-year) cyclical pattern in Japanese yen futures versus U.S. dollar, as it was when I first wrote about it in July. Although not perfect and not fully symmetrical, the cycle does “pick” the major up and down moves. The projection is shown at the right.

Do note that the cycle was obtained by visual examination of the available data; it has not been “discovered” through the application of any cycle finder program. Yes, the data history is limited but the cycle accuracy is impressive. (Note also that this analysis is not a buy or sell recommendation.)

What the Cycle Says Now

The cycle now suggests that a low is possible at any time. As soon as my timing indicators in this market turn bullish, I will be on board for what should be a major move up in yen vs. dollar Forex and futures. If the cycle holds true, the next few years should prove to be very bullish for yen/dollar. And now it becomes a game of patience!

It's important to note that while historical patterns can provide some guidance, they are not guaranteed to repeat exactly. Market conditions and external factors can always introduce variability.

Figure 2: Cycle low developing

(Charts courtesy tradenavigator.com)

About Jake Bernstein, FSC Board Member

Jake Bernstein has been publishing Jake Bernstein's Weekly Futures Trading Letter since 1972 and trading futures and stocks since 1968. His forecasts and opinions are quoted regularly in the financial press and on financial websites, and he is frequently interviewed on radio and television throughout the U.S. and Canada, including Wall Street Week, CNBC, JagFN.TV, and WebTV.com. In addition to speaking extensively in the U.S., Canada, Europe, and Asia, Bernstein is a consultant for investors, traders, industry, financial institutions, brokerage firms, and commercial firms. Floor traders, professional traders, money managers, and hedgers, both new and experienced, subscribe to his market advisory services. Bernstein is based in California, U.S.