Welcome to EV's point and figures. This blog is dedicated to the use of point and figure charts in technical analysis.

Although P&F first appeared in charts in the 1930's, it is an often overlooked techique for analysing stocks and charts. A poor relation compared to line and bar charts and their range of momentum indicators. Yet few charts provide a clearer picture of the daily battle between bulls and bears for market control.

Like most methods, it should not be used in isolation. It should form part of an analysts 'tool box' and be used with other techniques to help form an overall view.

The charts that appear on this blog and any accompanying comments are purely for information purposes only - my own personal take on where the prices may be heading. They do not constitute investment advice.

Wednesday, September 15, 2010

Nikkei boosted by currency intervention

The Bank of Japan intervened in the currency markets for the first time since 2004, to weaken the yen and stem its appreciation against the US dollar......

Not sure how successful this will be in the long term. Currency intervention is a fairly blunt weapon and in the past it was often undertaken on a co-ordinated basis between central banks. In the current climate I suspect all central banks would like weaker currencies to boost their own country's/region's exports, so will self interest take over?

Either way, it provided the Nikkei with a major shot of adrenalin. Clear support at 8,890 and an activated upside target of 10,200. It needs to overcome resistance at 9,750 and could potentially do so if the US dollar suddenly perks up. But I can't see currency intervention providing anything more than a temporary boost and the yen is regarded by many as a safe haven currency.

I wonder if the BOJ bought US Treasuries with their newly acquired dollars??!

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