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A1 Trading

Why You Should Be Shorting The Yen Now

January 27, 2022
Frank Cabibi

With nearly zero moves towards tightening monetary policy, Japan's currency stands almost no chance against the major pairs like GBP, USD, EUR, CAD and AUD. Here are some reasons and setups behind why shorting the yen could be beneficial in your trading.

High Debt-To-GDP

If you were to look at the amount of accumulated debt in 2020, you would see an extremely high increase in the amount of debt Japan took on paired with their stagnant and somewhat dwindling GDP over the span of a year.

shorting the yen
https://tradingeconomics.com/japan/government-debt-to-gdp

Japan also has a negative growth outlook GDP-wise. We are probably not going to see much improvement in the economy or in the currency in 2022. And even if Japan decides to switch gears at some point this year and tighten policy, the others have already had a head start. Interest rates are incredibly important in the world of forex, and the fact that other countries are taking that initiative before Japan is a big indicator for yen-shorters.

Best Pairs For Shorting The Yen

shorting the yen
GBPJPY could be a promising pair to long if price can break above a falling trend line on the 4H chart. Further resistance lies above around 155.420s should the pair close above this level and break out.
shorting the yen
USDJPY looks very bullish even as it tests resistance on the 1D and 4H charts. It looks like the pair wants to break above this level and test the top of this channel around the 116-116.900s.
CADJPY looks somewhat bullish on the 1D chart as the pair is stuck between support and resistance levels. The 50 and 200 DMAs lies below the price which suggest a bullish trend bias for the pair. If CJ can close above the 91.159 mark, we could see a further move higher to the 92.200s.

For more forex analysis on other pairs, click here.

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DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
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