Understanding the Power of JPY Indicator.
The Power of JPY indicator is a fantastic tool that shows the relative strength of the Japanese Yen against other currencies. It calculates its value based on the closing prices of seven currency pairs that include the JPY.
This indicator is particularly useful for traders employing mean reversion strategies.
To illustrate, let’s take a look at the JPY/USD currency pair, where JPY is the base currency and USD is the quote currency.
Start by adding the Power of JPY to your chart, followed by the Power of USD.
You’ll encounter two key scenarios:
If the indicator curves are close to each other, it indicates a higher probability that the price of the JPY/USD pair will go UP.
However, remember to consider the overall market context, including support and resistance levels, before acting on the signals!
If the indicator curves are far apart, this suggests a higher probability that the price of the JPY/USD pair will go DOWN.
As with the first scenario, always take into account the broader market situation, including relevant support and resistance levels.
Comments 0