JPY crosses trend, relative strength reality check

Since money is not an unlimited resource, most traders face a problem of picking the right pair to trade/where to deploy. This is a systematic, scientific method to select pairs based on a existing theme that any individual can adopt over gut feeling. Each user can personalise starting point and time frame but important premise is that trend has not changed.


Relative performance

  1.  Since 15 December FOMC, JPY gained most in terms of GBP making GBPJPY pair the best short.
  2. Following good shorts were NZDJPY, USDJPY in declining order.
  3. AUDJPY turns out to be worst performer.
  4. Starting from beginning Feb, there is little change except for a swop between NZD and USD.

JPY overlay, relative performance since 15 Dec FOMC | Source:


JPY overlay, relative performance since beginning February



  1. Month – month, NZDJPY still down, now 75.45 is just a shade under 38.2 Fib-R of Feb hi-low.
  2. M-M, USDJPY still down, now 113.39 just under 23.6 Fib-R of Feb hi-low.
  3. On same basis, CADJPY is down, now 85.19 is 76.4 Fib-R.
  4. EURJPY now 125.89 is just shy of 38.2 Fib-R.
  5. GBPJPY now 161.70 is under 38.2 Fib-R.
  6. AUDJPY now 85.86 is between 76.4 – 100.0 Fib-R.



As a tool, such method looks at relative strength based on past performance. While adjusting duration and starting point of reference creates a theme e.g. since the last time Yellen talked – that can improve relevance, user relying on such a method is assuming that past trend is intact.

Note that overlays (above 2 charts) do not lie when compared to inspection of individual charts. GBPJPY and NZDJPY which were labeled ‘best shorts’ are below 38.2% retracement of their previous month’s movement. On the other hand, a strong bullish pair like AUDJPY is close to retracing it’s entire Feb losses. In fact AUDJPY did a tiny bullish expansion yesterday, trading above February high briefly.


Connect the facts here with what Binni posted in G+

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