USD/JPY in Late August 2007

Foreign exchange volatility remains at historical highs across the components of the carry trade basket. In fact, USDJPY volatility as implied by one month over the counter FX options is much lower than it was during last week’s carry unwinding and this more stable environment should make carry trade eye catching for many investors.

USD/JPY volatility OTC USDJPY options is lower than it was during last week’s carry unwind ( Last week IV jumped to 18 percent, nearly two times the average volatility of the past year).

With this much volatility, this should make carry trade more attractive for many investors.

USD/JPY Mid July

As you can see by the chart, todays trend is down.

I have been trading the usd/jpy for a while, traditionally I make the pips in the trend. The only way to know when the trend is in effect is to know how to read the “right” indicators.   Specifically,  learn how to use and read Pivots. The usd/jpy is the only currency that bounces off of its pivots meaning it can come to a dead stop on a pivot and turn right around and go back where it came from.