 Hi, my name is Leon Roe currency trader and trading coach at trading 180.com and in this video I'm going to be talking about if the dollar yen is a buy, right? So technically we've come down to a very nice Level of demand right and we've got some some confluence in this area some horizontal Support as well. Now, is it a buy right now? Now this is the question you have to ask yourself from a technical perspective You can just take that trade and look for obviously an entry on a lower time frame. Yeah, or you can do a bit more analysis on You know what I guess why you want to be buying this this this currency pair So what we're looking at was we're buying you want to be buyers of the dollar right and setters of the Japanese yen Yes, we know that you know prices have been you know trending down for a little bit But why have prices been you know, especially this gap down and dropping right? Well first things first you've got Risk sentiment in play. Yeah, so you've got risk off and risk on Market sentiment and at the moment risk offers in play. So risk off basically means when there's a lot of uncertainty in the market Then money flows into safe haven assets like gold and in the currency markets It would be the Japanese yen and the Swiss Frank has seen a safe haven currencies and you can see I'll leave this link in the description box below. It's the Guardian website great blog Daily blog and it gives you pretty much the headlines trade wars markets Realist China exports fall and there's some other stuff going on as well European stock markets for China trade to a surface narrowed Asian stock markets in the red state media China can handle trade war US stock market stuff and bring it biggest fall since January last night. You've got some Bullet points here, you know markets world by trade war and you know, basically shrinking global Potential global market as China are the world's, you know, biggest trade partner, right and bigger than and the World's global engine kind of thing So we're in a risk-off environment at the moment. Yeah So again money's piling into safe haven assets But one of the things you have to also consider is Value right so many traders chase price. Yeah, not really knowing what they're buying So price isn't always Reflected in value and value isn't always reflected in price. Yeah, so We know that the dollar is the current currency to buy why And before I get to that, I just want to go to an article and It talks about the six must see quotes from Amazon's Jeff Bezos and one of the and he's you know, one of the richest guys in the world It's not the richest man in the world Known anyway and one of the I want to read this here, which is really really a great Point when talking about price and value in distinguishing the two Yeah, so from here. It's almost 20 years ago Bezos was not freaking out during the dot-com meltdown even though the stock had gone from over 100 Dollars per share to just six in less than a year. He saw things differently Yeah, the stock is not the company and the company is not the stock And so as I watched the stock fall from a hundred and thirteen dollars to six dollars I was also watching all of our internal business metrics numbers of customers profit per unit Every single thing about the business was getting better And so while the stock price was going the wrong way everything inside the company was going the right way yeah, and Really this little bit as well and I refer it back to the dollar yen So there are valuable lessons galore for investors in these three quotes Especially this last one most importantly when you invest in a company or for example with your trading Make sure you write down your reasons for doing so so you know your trading plan and what you need What would need to happen to make you sell right? Be sure these reasons have nothing to do with a stock's price or with the stock's price and everything to do with the Performance of the underlying business Yeah, so you're not looking at price do not chase price. You're chasing what value Yeah, you're chasing the performance of the underlying business and by doing so you still yourself again short-term stock market movements or market movements While redirecting your attention to the long-term arc of the company you're investing in so relating this to Forex and back to the dollar yen What are the Dollars underlying assets and what so I say you know performance of the of the dollar compared to the Japanese yen Yeah, why is it that we want to be buyers of the dollar over the yen now Going to this website called trading economics And if we look at the fundamentals first of all, we're gonna look at The US dollar United States dollar economic indication you can get that by basically going to indicate as countries and clicking on US dollar or US United States and then doing the same thing for the Japanese yen and by all measures What gives a country and the kind of currency its value is how well the country is doing as well as interest rates and inflation, right? So by every measure you can look at the dollar and look at the GDP growth rate 3.2 unemployment rate Inflation rate 1.9 and inflation the target is supposed to be all central banks want at least a 2% target Right and interest rates are at 2.5 so the higher the interest rate You know without getting too far away from inflation as far as the 2% target the better interest rates is a return on You know your investment if I'm betting on the dollar I'm gonna invest in the dollar then I should be expecting the 2.5 percent interest rate now Let's compare that with the Japanese yen Japanese yen 0.5 growth rate compared to the United States dollar or 3.2 and then we go down You know unemployment is called inflation rate 0.5 So it's furthest away from their 2% target Whereas inflation rate is at 2% well and near enough and then the interest rate is minus 0.1 whereas the The dollar is 2.5 by pretty much nearly all measures the dollar is way ahead economically and monetary policy wise When it comes to value over the Japanese yen, right? So If we go back to the chart Yes prices might be falling due to risk sentiment and risk off sentiment But when risk comes back on and risk on meaning that all is well in the world right and investors Have got some risk appetite. They want to put some more money on the table for higher returns and higher yields. Yeah This is going to look like an absolute bargain now What I'm saying is is that I'm not saying go to your broker and start buying the dollar yen now Right because risk sentiment is still off, but understand that charts are for timing. Yes We look at you know the price chart. We look at demand zones We look where you know past value was proof of value, you know not value-based drop drop base value in balances and supply and demand That's a different concept. I'm looking for proof of value. Yeah, this is proven in the past Yeah in March proof of value prices went high. So when prices come down here again This is where we're looking for proof again. Now. Will this work? Will this not work? This is just a game of probabilities. We manage our risk and we go for more than that but right now the dollar is Valuable we just need now the market and risk on sentiment to come into the market for Donald Trump and China to you know Hug and hold hands and degree on a negotiation Right and and have an agreement right and once that kicks in if that does kick in maybe next week Maybe next month. Who knows right, but if that does happen Dollar and as long as the fundamentals stay the same. Yeah, the dollar is continues to be, you know the strongest currency out of the eight major currencies dollar is looking like a Great buy Maybe not now. Maybe not this week. Maybe not even maybe into next week depending on obviously risk sentiment, but Overall the dollar is a potential buyer. It's not obviously financial advice But this is the level of analysis Yeah, that you will get if you were, you know Study the free fundamental analysis course in the description box below, right? You can, you know, ask me email me After after you watch that email me anything and I'll try and get back to you ASAP, but Hope this makes sense We don't chase price. We chase value. Yeah, and potential value is On the side of the dollar and if that doesn't work out, then we'll just be buyers down here This is discount prices so, yeah please like subscribe share and I will get back to you if you leave a comment as soon as possible. Have a great trading week and take care