So here’s one I’m watching closely this evening. The yen looks as though it might form a bearish pin on the dailies in and around a level that has served as strong support in the past — February just gone, November last year, etc. If the pin bar plays out, I’ll look to get in short towards a downside target somewhere in the region of 110.7 region. Usual pin bar risk management rules apply, giving me a nice ratio on the position.

As a side note, I’m pretty bearish on the yen as a base long term. The Japanese economy is in real trouble. People are holding too much cash, the government (however hard Abe works) can’t seem to stimulate consumption and downside yen forces might be boosting exports, but this boost isn’t filtering though to the more important elements of the macro equation. The country is in for long term weakness, and a considerable amount of stimulative policy (which will only really translate to more currency weakness).

This doesn’t mean I’m not happy to enter short, but it makes me a little more picky on the risk side of things.

Anyway, let’s see what happens tonight, and I’ll update when I know more.

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