The study analyses the interaction between the trading behaviour of 1,024 moving average and momentum models and the fluctuations
of the yen-dollar exchange rate. I show first that these models would have exploited exchange rate trends quite profitably
between 1976 and 2007. I then show that the aggregate transactions and positions of technical models exert an excess demand
pressure on currency markets since they are mostly on the same side of the market. When technical models produce trading signals
almost all of them are either buying or selling, when they maintain open positions they are either long or short. A strong
interaction prevails between exchange rate movements and the transactions triggered by technical models. An initial rise of
the exchange rate due to news, e.g., is systematically lengthened through a sequence of technical buy signals.