“We are stalking a potential short entry in the Japanese yen through buying YCS an inversely correlated currency ETF. After several months of consolidation, the price action in YCS has tightened up considerably in recent weeks,” said Deron Wagner of Morpheus Trading Group.
YCS has indeed been consolidating for several weeks, trading in a tight range and having not traded above $64 in over a month, but the chart shows the ETF could be poised to breakout of a downward sloping triangle.
“On November 7, $YCS had a very wide-ranged decline, but the price immediately snapped back the following day. This ‘shakeout’ enabled the ETF to clear back near its high of the week. That price action caused a bullish reversal candlestick to form on the weekly chart (highlighted in yellow), and volume ticked higher as well,” notes Wagner. “Now, YCS is back above both its 10 and 40-week moving averages, as it pops its head above resistance of a 6-month downtrend line on increasing volume and with a bullish reversal pattern. A move above last week’s high should spark bullish momentum that causes YCS to rally towards its May 2013 high in the coming weeks.”
ProShares UltraShort Yen
