FXStreet (Barcelona) - Goncalo Moreira CMT, FXStreet Technical Analyst notes that previously, he had written about the yen and how it had displayed a meaningful trend change accordingly to the breadth indicator:

Key Quotes

“Specially against the Australian dollar or the New Zealand dollar where impressive 180-160 pip rallies are being mustered, fading these markets with the expectation of a 38.2% to 50% correction emerges as a decent trade idea.”

“Since then the yen BPI touched bottom at 0% and has released some of the oversold pressures in sympathy with risk-on flows, but without conquering the 50% mark.”

“The euro BPI touched oversold levels at the beginning of February and since then it shows a buoyant structure hovering above 50%. The index peaked in February the 19th at 84% when EURUSD was reaching 1.3770. A failure to surpass the same level on the index now that the EUR/USD is at 1.3900 would be considered as a negative bearish divergence.”

“The U.S. dollar BPI reflects a neutral behavior and mixed performances against other world currencies, with a minor degree of strength in recent days. Right now it can be taken as a neutral counterpart to more overstretched currencies like the GBP, NZD, or JPY.”