Dollar vs. yen

April 16, 2015 10:00 AM
Bear market in a range, may breakout soon

As the monthly chart illustrates the U.S. dollar yen exchange rate has been volatile over the past 13 years. Meanwhile, a quick look at recent action paints a different picture.

The daily chart of the yen illustrates that the currency has weakened against the U.S. dollar since May 2014. However, the dollar has been on a tear against all currencies -- the dollar index is up around 25% as of the end of the first quarter. Recently, since November 2014 the dollar-yen relationship has been trading in a range between 116 and 122. This year, 2015, has been a year for trading rather than investing in most asset classes. Volatility is picking up in markets across the board. It is only a matter of time until the yen breaks out of its recent trading range against the dollar. When it does, there will be lots of opportunity for short-term traders. Add to that the overall volatility in all currency markets -- particularly in the euro where a bear market has gripped the pan European currency. This all adds up to a myriad of opportunities for the nimble trader.

Nadex products are ideal for short-term opportunities

Nadex, the North American Derivatives Exchange, offers binary options and spreads on the dollar versus yen as well as on the euro versus yen, British pound versus yen and Australian dollar versus yen currency pairs. These products are ideal for those trading in volatile currency markets who wish to limit risk. 

Binary options are a yes-no proposition, your profit or loss is limited from the outset. Nadex designed spreads so that traders can position for higher or lower short-term prices. The risk of these positions is limited, in every case.

Day traders can use Nadex products to take a position in the major foreign exchange markets. These trading products use spot foreign exchange markets as a basis.

Volatility has been the hallmark of 2015 in currency markets. Nadex products are a great addition for day traders looking to limit risk and take positions in these markets. Whichever way the yen moves, those who choose Nadex products will enhance their portfolios. Bulls, bears and even those who believe the market is going nowhere can use Nadex instruments. Nadex products give everyone the chance to participate with limited risk.

Futures, options, and swaps trading involve risk and may not be appropriate for all investors.


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About the Author

Andrew Hecht,