2024/11/29
Daily 4XSetUps - We Close This Long USDJPY SetUp With A Loss
“usdjpy price action this week a massacre - let's not kid ourselves!
will boj raise interest rates further? was this week an overreaction?”
“We will adjust the degree of monetary easing at the appropriate time if we become confident or certain that the economy will move as forecast by our economic and price outlook — particularly that the underlying inflation rises toward 2%,” Ueda said in a Nikkei interview conducted Thursday and published Saturday in Tokyo. The next rate hike is “nearing in the sense that economic data are on track,” he said. - was on yahoo! finance to read, today. And this was another building block that caused me to close this long USDJPY 4XSetUp! Because when I formulated this long USDJPY 4XSetUp, I did not assume that the Bank of Japan would raise its interest rates several times! Which they may (not) do! I don't know! But I haven't thought about it (yet). And that's why I'm so consistent, based on today's inflation data from Japan and/or rather the reaction of many colleagues and other competent observers, especially the price action in
USDJPY itself, and am closing this long USDJPY 4XSetUp, with today's closing price, on Friday , November 29, 2024 - on US Black Friday. I just couldn't imagine that reaction. Of course, one could take into account that Japanese inflation turned out the way it did - and so did I. The annual inflation rate in Japan fell to 2.3% in October 2024 from 2.5% in the previous month, marking the lowest reading since January. But the price action reaction of the market, i.e. the other traders and investors? No way - at least from my side! Which is why I want to stay away from USDJPY for now after "USDJPY Suffers Significant Losses Amid Growing Expectations of BOJ Rate Hikes" as the Arabic Trader wrote today too.The price action no longer looks pretty bullish at the moment - let alone the environment. Quite the opposite - I am almost reminded of mid, late July, early mid-August, this summer of 2024. What happened there? As a reminder in the following...
“Unattainable goals appeal to heroes.”
Ray Dalio
149.659 USDJPY : 2024/11/29 - last price action
149.775 USDJPY : 2024/08/02 - High Of Panicked Selloff
141.682 USDJPY : 2024/08/05 - Low Of Panicked Selloff
This price action was and/or is still, at least in my opinion, truly important, because share prices had already fallen on Friday, the 2nd August 2024, after the publication of the monthly US labor market figures. And the sell-off accelerated on the following Monday, both in the
USDJPY and/or on Wall Street, in the US stock markets DJIA & 
SP500 & 
IXIC incl. 
NDX . The Japanese stock market 
NI225 suffered its worst point loss ever on Monday - and the largest percentage decline since 1987. And fell as much as -12% on Monday, August 5, 2024, before recovering most of the losses on Tuesday. US indices also fell more than average on Monday, with the SP500 and IXIC closing around 3% lower. The British 
UKX and the European leading index 
SXXP each fell by 2%. And volatility indicators like the VIX were, at the time, at levels last seen during the pandemic sell-off in 2020. What happened on ths botched ays, in early August 2024? For better or worse, traders and/or investors were forced to close their derivative positions due to the US labor market data, as the USDJPY exchange rate pair continued to accelerate its downward trend from more than 160 USDJPY, which had started since July 2024. And in retrospect, this above-average fast and low price action in the USDJPY was more or less the main reason for these distortions - because the price action, as we now experience every day, is usually not that big. On the contrary - usually. However, the key to the market turbulence was and still is to be found in the monetary policy of the FED and the BOJ. After all, the circumstances that supported the record highs of the global markets this year 2024 were the high interest rates in the USA (5.25% - 5.50) and/or the low interest rates in Japan (0.25% after the interest rate hike last week before, back than in early August 2024). Traders and/or Investors were and are still able to borrow in yen, which even until the last week before the w trend reversal formation, we had in USDJPY multi-decade lows, until the start of July 2024 incl. in higher-performing dollar assets such as technology stocks NDX and/or US10Y U.S. bonds. This process, which is called "carry trade" plunged during these two days - Friday, the 2nd 2024 and/or Monday, the 5th 2024 - on fears about the U.S. economy. And so, at the beginning of August 2024, expectations changed that the US Federal Reserve would cut interest rates faster and deeper than the majority of traders and/or investors previously thought - to support the US economy. And what happens in such scenarios if you get caught on the wrong foot in terms of monetary policy? Right - the majority's expectations change! And what about the price action? Correct - that's right also. The price action also rotates! How long? How high? How low? I don`t know! But I know that, based on the latest data from the US economy, the US economy is not headed into a recession. Almost the opposite - the US economy is growing out of the self-organized US stagflation, into which it had politically organized itself with the previous Biden & Harris government of the US Democrats. Therefore, Bidenomics was nothing more than a costly green domestic adventure and/or a naive militant foreign adventure by Democrats, under the guise of liberal freedom. So that we all now find ourselves at least after four years - Biden & Harris - but with less money, less purchasing power, in our private wallets. What doesn't just only happen to Americans, much more in most countries in our so-called West. And why, for better or worse, Trump was re-elected if I'm not mistaken.Which is why I'm capitulating today - even resigning - and closing this long USDJPY 4XSetUp with a loss beforehand. Because I fear that
USDJPY will not move back up as quickly as I originally expected when I wrote this long USDJPY 4XSetUp, after today's inflation data from Japan. I don't know how the Bank of Japan will react! Will the BoJ raise interest rates? Continue to remain politely reserved? Be that as it may, I'll just wait and see. And assume that the Japanese Bank of Japan will do the right thing for Japan. But what I can't estimate today. That's why it's better to have an ending with horror - than a horror without end. In this case even with a realized loss on our long USDJPY 4XSetUp.-----------------------------------------------------------
180.000 USDJPY : 2025/09/30 - target price
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152.604 USDJPY : 2024/11/08 - entry
149.659 USDJPY : 2024/11/29 - last price action
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140.000 USDJPY : 2024/11/08 - stop price
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Have a good time
- regardless of the price action!
Aaron
“daily 4XSetUps - …” is pure information material!
By trying to give you even more information about some trading capabilities to trade and/or invest in some securities. This post is not a call to action - it only provides information. You decide (not) to decide. Even if I am writing daily 4XSetUps with concrete entry prices, target prices and/or also stop prices! It is like it is - like I said; You decide to respond to the analysis I just formulated to buy, to sell, or to do nothing! More information about my approaches to investing in something specific or just trading it, or even just describing it, can be found in the daily "Another 48h - DXY ...! Analysis Post. Where I try to track the price action in
DXY every day so that we learn something new daily.
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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.