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U.S. Dollar / Japanese Yen
Short

USD/JPY - Short; SELL right here!

By Nemo_Confidat
Updated
The chart ought to be self explanatory.
(Should have cleared already that +400 pips to which the previous post - attached - eluded. :-)
Comment
The DXY, lately reliably running according to the numbers ...
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(While heavy Euro over-weight) ... also indicates a near term USD weakness, supporting this Short USD/JPY case.
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The most volatile, at the moment - Sun., Mar. 06.
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SELL it right here!
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SHORT Target -> 133.70
Comment
The close up;
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(8-12 pip Stops ought to be sufficient here.)
Trade closed: stop reached
Got out with -6 pips.
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Will try to Short again in the 136.40s,
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Ready to get LONG here, too.
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We'll be actively trading (loading on) it's cousin, the CAD/JPY, today.
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Buy - LONG - it up!!
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Buy it up! - LONG, on any reversal here.
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Stay LONG!!
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This is a one-way trade and the train is leaving the station. All aboard!!
LONG
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Loading, loading, loading ...
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SHORT
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Massive LONG
Comment
This has been a nice, smooth (and obvious) ride for the past +400 pips;
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... BUT, it is now over, here!
Dealers usually use the news (like a "rate decision", even if it's totally irrelevant ;-) for pattern completion. This time was no different. Look to turn around, and soon.
Trade closed: target reached
Any reversal here ...
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... is a signal to go LONG.
Comment
Since ...
Japanese Yen Steadies After Strong Inflation Data
tradingeconomics.com/japan/currency

Japanese Shares Hit Near 33-Year Highs
tradingeconomics.com/japan/stock-market

Japan Core Inflation Rises to 3.4% in April
tradingeconomics.com/japan/core-inflation-rate

Japan Food Prices Rise the Most Since 1976
tradingeconomics.com/japan/food-inflation

... it begs the question; Will the BoJ release (yield) curve controls and stop distorting the markets, for good?
Answer; If there ever was a fair chance for it, in the past 30 years, this is it!
(In which case expect a Yen rally in the range of 20,000-25,000 pips.)
Comment
Not a categorical suggestion!
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Rather, just a lay-of-the-land.
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This here ...
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... has an excellent 12:1 R/R for a LONG Entry!
Whether it's gonna fly depends on that previous stop hunt, whether it really was just that??... IFF Yes, then a turn here means a Long continuation. In any case a Long Entry here has massive upside potential for pennies in risk.
Trade closed: target reached
I'm just gonna take some "fast money" here and stop pushing my luck, for now, since I was way overloaded on this, to start with. (I'm still a a 12 lot long, with a +1/3 profit stop.)
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This is just a wait-and-see here, ready to jump back in.
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Jumped back in (added to) off that Stop Hunt - LONG;
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Adding even more LONGs here;
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... with a 12 pip Stop.
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Now, one can sit on;
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Even Money Stops. - And since it's now all "house money", just let it rip!
IFF this turns around here, it must take out 138.20s, first, blastingly. Possible ....
P.s. We have already locked 144 pips yesterday, between this and the EURJPY. Meaning: "All house money" means everything on the top of it. (No, we are not giving back the past 24 hours' profits! ;-)
Comment
Just an observation;
The BoJ's Pres. Ueda is not entirely wrong when said (over the weekend) that "inflation in not a factor in the BoJ's policy guidance.". Not necessarily because that statement in itself is true but rather because even a quick a back-of-the-envelop calculation shows that any "policy adjustment" - i.e., rate hike - here would "un-invert" US & EU yield curves, prompting a massive Gov. securities dump, world wide.
And since there must be a buyer for every seller ... A (very) conservative estimate in such a move would cost Japan $600-$800 Billion, on day one! (Very, very conservatively. A more precise estimate would put this number well in excess of $1 Trillion.) So, a Cost/Benefit analysis, under the present circumstances, makes such a move questionable - arguably Neutral - when global rates are sitting smack in the middle of even the widest, reasonably predicted rate range (0.5-7.5%), going forward.
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This looks like a worthwhile try here;
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... with very tight stops!
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This is very likely a SHORT, here;
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But I wouldn't load up on it, the other Yen crosses having much better R/R Ratios, for now. (EURJPY, GBPJPY, etc.)
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This is a one way trade! - LONG
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Having finally spent some 'quality time' on various yield curves (and curve controls; Japan) the conclusion is rather strait forward; There is no rational rate scenario where the BoJ would be forced to suddenly alter it's policy - release curve controls - at least not under 145.00 USDJPY.
(What biased my view, until now is the myopia brought on by being (very) long the Nikkei (i.e; long Yen) and thus, having to continuously hedge with this pair.)
Comment
A rather unique situation presents itself with this pair;
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As it stands, the odds are virtually even (50:50) as to which way this pair will break, from here? ... However, two things can be ascertained;
1) Whichever direction a break happens, first, it's likely result will be a 500 pip strait drive;
2) Both target levels (145.00 and 135.00), are equally clear and present targets.
E.g., it is even more important to keep a close eye on this pair for any technical clues - in either direction. (Fundamentals aside, as any new developments there would clearly give away the upcoming direction.)
Whatever happens here next, it is expected to be swift - even "violent"! (Current options positioning would indicate that there is over $1 Trillion poised for a directional move, in either direction.)
Comment
Currently FX Option flows are marking their highest levels for this pair in well over 3 years! Implied volatility has now climbed to a notable 3.4%, the majority volatility buyers targeting inside 2 weeks (8-13 days)! By the looks of it the largest buyers of volatility were Japanese Insurance companies (Yen repatriation?) which would hint at a fundamental shift/repositioning in policy - if it occurs. In any case, it will be interesting to see if the buying continues at the brisk pace during the next (tonight's) Tokyo Session? ... (At the very least that would provide some further clues.) E.g., A lot could be said for the next 6-12 hours, considering the action during the past 2 days.
Comment
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There was a significant shift in premiums in the last 15 minutes. (Not entirely surprisingly.)
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As it stands, a lot of Longs jumped in the last few minutes, bringing in the theta even more - as if that were even possible. This could be an indication that if they were going out on a limb before, now they're really starting to pull out all the stops!
This is still a wait-and-see but by the looks a decision is getting ever closer.
Start setting the Buy Stops (long entries) above the market and let the commercials push it through for you. (Don't be a hero and try to front-run them! There is still room here for a sudden shift.)
The Pivot here is 139.80 (which where it's at, right now) so one needs a decisive close above that, at least for the next couple of hours. (Provided that the premiums continue to shift in the present - Long - direction!)
Comment
Boom!! There you go - LONG
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One should be already Long here - and well into the money - if one took the advise and set the Buy Stops (Long Entries) just above the market, a few minutes ago - as suggested.
Trade closed: target reached
Got stopped out with a scratch - even money;
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FLAT for now. (Apparently we're back to neutral. They weren't ready to pull the trigger just yet, either way.) Back to wait-and-see.
Comment
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During the past 2 weeks an awful lot of positioning took place in this narrow range! There will have to be some fundamental driver before anyone is willing to take a direction here. (Which could happen at any time! May even be tomorrow - Friday? ...) In the meantime the BoJ feels the need to "reassure" all participants about ... the big Nothing?! (Virtually every day now someone finds the need to hold a press conference to announce that: "we are on it!". Suzuki, the other day; "Let the market set rates." No shiet!)
Ultimately, there is just too much money wound up here for anyone just to pull the trigger at the drop of a hat. Nevertheless, something is bound happen, and soon. (In the meantime options positioning has been reliable, so far, in pointing the way - or the lack thereof.) As it stands at the moment, this is a Long Bias, ever so slightly.
Comment
This pair ...
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... is in limbo here (still a Long Bias) with that major Stop Hunt still lurking under it @138.825. Ultimately one is looking to get Long somewhere around here.
A lot can (will?) happen tonight, all the way into Fri., the US numbers release.
Hopefully FX options will continue to point the way.
Long Bias, looking for entries. Patience!
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Just had to load up on this - LONG;
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... off of the 139.25 level. (This could very well turn out to be a mistake, being too early.)
Comment
Same story here as in the EURJPY, as this pair also seem to be in good shape here!
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Looks like that the buy held up rather well, after all, and there is now >20 pips for some cushion. But unlike the EURJPY long,we're looking to hold on (then add) to this one, with a potential upside target of 145.00!
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IFF there is a pull back ...
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... it is likely to happen here - SHORT
As the Nikkei continues it's scorching rally it raises the issue of potential Yen repatriation.
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Boom!!
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We're in good shape here!
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This one now has a clear Short target;
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@137.50
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This is now well on it's way ...
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... to it's target.
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Chances are ...
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LONG
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In line with the plan - above - ...
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... spent the better part of the day loading up LONG. (Luckily, had ample opportunity to do so.)
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That Stop Hunt has been looming somewhat ominously, for quite a while now...
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... and we're happy to collect our quick +232 pips and close out our Longs, for now.
FLAT
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Buy it up!
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LONG. Tight Stops!
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We're tightening our stop up here ...
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... just to lock in +300 pips in profit in this pair for this week.
This is likely continue up but it may get choppy around here, briefly.
Trade closed: target reached
Well, that didn't take very long! ;-)
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We got stopped out of our longs, having booked +303 pips net, for this week, in this pair.
Don't be short, though! Waiting for a new Long Entry until things change fundamentally.
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LONG
Trade closed manually
This could slam down here - inflation data;
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FLAT for now.
Comment
Just to confirm; This ...
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... is no way a short here - LONG! (Unlike the EURUSD, which is a massive Short!)
Comment
This thread has became too long to remain practical. E.g. opening a new thread for the USDJPY;

Summary
-----------------------------------
Calendar days: 96
Net profit: (USDJPY only) +1073 pips (including the currency hedge adjustments in support of Nikkei long positions - +1132% Net)
Max risk; 0.71% of capital;
Max draw-down: -0.43%
Number of trades: 52 (including hedge adjustments)
Average R/R: 1:10.25 (Exclusive of hedge adjustments)
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Refer to the new USDJPY thread for continuation.
Harmonic PatternsTrend AnalysisUSDJPYusdjpysellusdjpysellsetupusdjpyshortusdjpyshortsetupusdjpysignal
Nemo_Confidat

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