EURJPY shorts on Global Macro expectations
The reasons that back my case are simple.
First of all, we need to take into consideration that Yen is a high risk off asset, with yen longs taking place whenever there is a big uncertainty in the world, or a black swan event unfolding.
If you believe that a big crisis is yet about to be seen then you need to consider shorting EURJPY , I personally do for the reasons below.
Yen Long Factors
-New Governor UEDA taking head and within the next meeting of 28th of April along with market expectations Yen is expected to appreciate on expectations that the bank will widen the Yield curve band or even
will take it off. Any positive tone on Interest rates will be considered at the meeting as well.
-Sharp decreases in headline inflation such as the one from 6 down to 5% are signs of a big incoming crisis. Usually, when we run into recession, inflation is drastically moving to the downside, this drugs US Yields lower on expectations for more rate cuts taking place from FED this year.
-U.S. NFIB Small Business Optimism showing a bleak picture. Even though this indicator is considered a 1-star indicator from calendar news, it is the omen of the US unemployment rates and Jobless claims climbing up while US NFP and Jolts data moving lower. So on the aggregate, it is the first sign before US Labor data start showing a very bad picture.
EUR Short Factors
-EUR Large Speculators are overbought on EUR across the board and this shows that if and when they are about to unfold their positions we are going to see a big short playing on EURO , it just needs a big catalyst to take place for them to follow through.
First of all, we need to take into consideration that Yen is a high risk off asset, with yen longs taking place whenever there is a big uncertainty in the world, or a black swan event unfolding.
If you believe that a big crisis is yet about to be seen then you need to consider shorting EURJPY , I personally do for the reasons below.
Yen Long Factors
-New Governor UEDA taking head and within the next meeting of 28th of April along with market expectations Yen is expected to appreciate on expectations that the bank will widen the Yield curve band or even
will take it off. Any positive tone on Interest rates will be considered at the meeting as well.
-Sharp decreases in headline inflation such as the one from 6 down to 5% are signs of a big incoming crisis. Usually, when we run into recession, inflation is drastically moving to the downside, this drugs US Yields lower on expectations for more rate cuts taking place from FED this year.
-U.S. NFIB Small Business Optimism showing a bleak picture. Even though this indicator is considered a 1-star indicator from calendar news, it is the omen of the US unemployment rates and Jobless claims climbing up while US NFP and Jolts data moving lower. So on the aggregate, it is the first sign before US Labor data start showing a very bad picture.
EUR Short Factors
-EUR Large Speculators are overbought on EUR across the board and this shows that if and when they are about to unfold their positions we are going to see a big short playing on EURO , it just needs a big catalyst to take place for them to follow through.
Note
This week we saw US PPI falling lower than the lowest Reuters estimations along with US Core PPI decelerating further from previous results even though It came at consensus. Similarly, US Jobless claims as expected climbed higher than the 232.000 that was forecasted. All these help US Yields move lower and strengthen Yen, although this is not a case that appears as strong yet on EURJPY, unlike USDJPY.
I expect a sharper fall in labor data with Jobless claims and unemployment numbers climbing higher which will weigh on US NFP overall as all the data fits into the NFP.
It still remains for EUR Large speculators to start unfolding their positions and at the same time to get Yen longs appearing to be sharp but we are getting the first signs with the data.
Note
Yen depreciating along with US Yields, on the latest bullish US Michigan Data. Looking to add more shorts at 147.5 and 148 areas respectively.
This is a very low risk per area shorted because as a position trade setup , it requires to patiently build a bigger position as we keep getting closer to events that might affect and strengthen Yen.
Note
Moving SL to 147.88 (recent swing highs) in case the BoJ doesn't deliver a hawkish forward guidance and or remove the YCC.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.