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LONG USDJPY @105.8: NEUTRAL FOMC; DOVISH & EASE BOJ & RISK-ONWe had the best possible outcome for FOMC's Rate decision and Fed Yellens speech which was neutral IMO as expected, with the Economic Projections being dovish, downgrading the projected rate hike cycle. We now look to BOJ. Trading strategy: LONG USDJPY (possibly short also GBPJPY for longer term investors or investors that want to hedge against a hawkish BOJ) TP @>107 = 100pips at least - SL @104.9-105.2 Reasoning - FOMC overall was neutral, we had lower projections but Yellen remained mildly upbeat, telling the market to shrug off the short NFP report (quite rightly). - So this means $ demand/ supply remains flat. - The main driver of the LONG UJ play is on the JPY side. Given that FOMC was flat, this means JPY "risk-off" and uncertainty buying which would have arisen if the fed was aggressively hawkish/ hiked was neutralised - meaning JPY "rate hike induced" safe haven demand was neutralised as instead the FOMC helped risk trade higher = LONG USDJPY as JPY demand falls - So now we have a situation of neutral USD and neutral JPY as there was no rate hike to unsteady markets and cause JPY to be brought - So the driver of the LONG USDJPY is the fact that IMO the BOJ will be aggressively dovish and likely to cut rates - their core and CPI prints are consistantly below 0% at -0.5% for Tokyo CPI and Core, with National at -0.3% for both. These CPI prints are the average print for the last 6 months meaning BOJ policy has been inefective in reaching their goal as inflation is stale and not rising. Thus IMO they have to CUT and EASE and be DOVISH = Long USDJPY - Further, Kuroda BOJ head said he is aware of JPY trading strongly due to its safe haven properties and he has stated he is prepared to fight this risk-off led Yen appreciation - this means HEAVY easing to negate the JPY risk-off strength and weaken the currency = long USDJPY - Finally, a dovish BOJ helps ease the risk-off sentiment in the market at the moment (stocks falling and gold rallying) as BOJ easing puts more liquidity into the markets - calming the risk-off sentiment means LESS JPY buying and MORE JPY selling = LONG USDJPY Evaluation - So with USD as a stable denominator, I expect the BOJ to heavily ease in order to 1) improve their inflation performance closer to their target 2) to devalue JPY from the risk-off buying that brexit uncertainty has caused. - Further, UJ is the best expression of the short JPY play as EUR and GBP are both comprimised by BREXIT uncertainty - which is constantly trying to trade eur and gbp lower - hence a long ej or gj is not advised - UJ is the least affected of the majors by brexit - *see my dynamic straddle post attached for more details* - on that note one may argue AUD or NZD could be used for the long, since they too are even less affected by brexit downside, which is true, however i dont have enough experience in those markets - if think there is a better denominator than USD for the long then by all means use it - however IMO USD is the best of the bunch for future dollar demand as they are the only Central bank to be hiking NZD and AUD are still cutting. - Also UJ imp volatility is finally falling with 1wk implieds dropping to 12.55 (-3.45), which improves the environment for buying. Plus as you can see below Historical Vol is also falling, once again illustrating that price may be ready to start rising again - low vol = more buying. Plus the ATR trades lower than average which is a bullish sign - bull markets range less. - And we are still oversold massively at -2/3 SD of the mean of the weekly. Plus we trade close to the handle at 105.35 which is the strongest support level in USDJPY history thus helping upside from here (unless we break ofc). Comments welcome
Long
by QuantumLogicTrading
8
DYNAMIC STRADDLE: USDJPY & GBPJPY - TP FROM BOJ & FOMC EVENT VOLThe best Idea to play BOJ and FOMC from a risk-averse perspective is to own both in a Long Straddle Strategy Dynamic Straddle: Long USDJPY & Short GBPJPY - TP from volatility & Event likely hoods TP levels = cannot be greedy else you may miss one trades exit point so <25 pips when it goes in your direction for each - total TP = 50pips as 2*25pips Reasoning - Traditional Straddle involves would be long and short the SAME cross.. - However i suggest we long USDJPY as UJ has proportionately MORE upside possibility: 1. FOMC is likely to be neutral-Hawkish, this will help UJ trade flat/ higher = Supports long - - *FOMC PARADOX* important to note that in this sensitive risk-off market if the FED is too hawkish/ hikes it can cause a UJ sell off, as higher rates means greater economic/ market uncertainty as liquidity and financing becomes tighter (despite rate hiking usually making USD trade higher through increased $ deposit demand for higher rates) 2. BOJ is likely to be dovish, this will help UJ to trade higher (especially in this risk averse market - easing helps calm mrkts) = supports long 3. USDJPY ISNT directly impacted by BREXIT fears as GBPJPY as USD and JPY can be considered safety assets, this helps USDJPY trade higher = supports long So we have 3/3 for long USDJPY. - Now to hedge this trade AND benefit from possible downside, we SHORT GBPJPY as GJ has proportionately MORE downside possibility. 1. FOMC neutral-hawkish, drives risk-off momentum (higher rates reduces market liquidity and undermines economic growth thus increasing uncertainty) which drives demand for Yen/JPY, increased demand for JPY supports short GBPJPY 2. BOJ being dovish/ easing potentially helps JPY sell off - however, GBPJPY will be the least sensitive of JPY seller of the JPY crosses, as GBPJPY is the perfect play for Brexit and risk-off, hence in the long run JPY selling wont last long in GBPJPY as once JPY is cheap, buyers will enter to continue hedging/ speculating on brexit with the favourite pair, poor potential/ long run JPY sell side = supports gbpjpy short 3. GBPJPY is directly impacted by Brexit uncertainty in two ways. 1) as investors wish to sell GBP as the uncertainty is only negative for GBP (especially when polls are at 55%). 2) as Investors wish to buy JPY for their "safe haven" asset play. UJ only has the JPY buying to push it lower, which is limited/ offset further as USD buying can also be considered a "safe haven asset) = Supports short GBPJPY We have 3/3 for short GBPJPY Evaluation. - We have 3 points supporting both LONG UJ and SHORT GJ - AND by playing this trade we are able to gain from ALL eventualities, we dont have to guess the BOJ or FOMC outcomes since we have a LONG and a SHORT we have covered ALL eventualities. - Also from a vol perspective, GBPJPY risk reversals continue to become negative by a significant amount 1wks lost 0.6 to -2.1 (from -1.5), so investors continue to demand GBPJPY downside puts for speculation/ hedging - supporting the short. - USDJPY ATM volatility, sold off significantly with 1wks losing 3.55 to 12.45 - lower vol in UJ supports buying. *Any questions on why i think FOMC will be neutral-Hawkish or why BOJ will be dovish-easing please ask in the comments*
by QuantumLogicTrading
Long USDJPY Favored | 150-Week SMA Key Resistance Despite the bullish pressure from the beginning of the week, there has been no H4 Close above the 150-Week SMA. Continued failure at this point and price will likely be pushed back down to 110.600 Pivot / Previous Resistance / 50% Fib of the Wave A-B on Chart (Wave labels are arbitrary in this case). Strategy: Wait and See approach for now. A H4 Close above the aforementioned level and a Long Position will be established targeting 112.500 as part of the measured move. Otherwise, the pair may catch a renewed Bullish bid at the 110.600 Level.
Long
by SimplePhi
USDJPY: Yen long updateTraders, all who followed my reccomendation to short USDJPY are in the money, and with good potential for more downside. We have entered positions to long the Yen (long JPYUSD, short USDJPY, long FXY) and are looking to add to it, either on retrace, any kind of new high, or after a new time at mode signal emerges in the daily chart. For the time being, keep the trade running, you might be able to book half if you want, and move stop loss to entry (not 100% needed). There are 3 possible targets for this trade, the lowest one being the monthly range expansion validation target. If we don't hit this level by May 31st, we might have good opportunities to fade the decline with any valid long setup. For the time being, I'd only look for shorts in this pair, until we either hit the targets, or the downtrend time runs out. The weekly/3 day chart downtrend signal implies continued downside until at least May 26th. Good luck if in the trade, or looking to enter new positions, or join the trend. There will be more chances to do so on the way down, and we will take all opportunities with my private group. Cheers, Ivan Labrie.
Short
by IvanLabrie
4
CADJPY: Potential for huge downside in this pairCADJPY has broken under a previous week's low recently after finding massive supply coming in at a previous low volume resistance level, where the bears showed hand. Interestingly enough, we now have 5 closed quarters without a new high, and a close under the quarterly mode, thus confirming a long term downtrend in this pair is viable. The weekly chart shows us with clarity where the highest activity levels sit. Currently we have 8 week levels where price has transacted at, soon to become 9, thus favoring continuation of the downtrend that kicked off during December 2015. Once we observe price move under 82.774, it'd be safe to assume we might have a sharp decline, with potential to hit the 75 handle in 9 weeks or less. Confirmation according to the time at mode logic would arrive later, but I'm already in this trade based on the daily chart price action. We have 5 days without a new high after today's close, further validating this thesis. You can go short on any intraday retracement, or at market now, with stops above the 85 mark. Good luck if taking this trade, if interested in receiving timely trade signals and/or tuition, contact me privately for more information. I'm currently offering a discount for new clients who opt for my trading course. Cheers, Ivan Labrie.
Short
by IvanLabrie
4
CHFJPY: Want to short oil? Here's a nice proxy pair...CHFJPY is offering a terrific reward/risk opportunity in the daily chart. As you can see I have marked a level of net short positioning for oil futures traders, as well as added the oil line chart as an overlay to the comittment of traders report data indicator so you can see what happened the last time commercial hedgers' net short positions reached these levels. I anticipate downtrend continuation naturally, and as you can see, this pair is a good alternative to outright shorting oil futures, and if you factor in pips instead of % distance, it can outperform the oil shorts, with potentially lower risk (considering the way the chart's setup). As a sidenote, commercial traders are now net short the Swiss Franc, which is good incentive too. (They have been wrong in the Yen, but large specs have captures all major moves in it and are net long and increasing longs currently). Entry is either a new daily low, or a retracement to the red triangle tip with stops above the red line or using 1 to 3 times the daily ATR value. If interested in my trading signals, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year. Cheers, Ivan Labrie.
Short
by IvanLabrie
USDJPY short Opportunity Maybe?As the rally in US stocks continue I taught it would be a good idea to look at the USDJPY since it has been getting beat on in the last few months due to the strengthening of the Japanese Yen. BOJ has introduced negative rates to cause devaluation but that is not working. Going back to Technical Analysis, we can see some support levels that USDJPY is approaching. I am going to sit back and see how this trade progresses forward. It could hit resistance at 105.508 in which if it closes below we could see a a re-tracement or a major draw down for the pair. Or we could see a retest of structure (resistance) and might open on opportunity to get short. Notice that we could be reaching a minor level of overbought so we could see some selling pressure from other traders. Tell me what you think down in the comments. Look forward to hear your taughts on the pair. FX:USDJPY
Short
by Thinkfund
JPYUSD: Long yen, deleveraging in the backgroundIn this chart I analyze the currently active signals in the JPYUSD chart, as an alternative way of approaching USDJPY to prevent biases. I'm seeing an active 2 week trend, which has until June 27th to complete, but also if you dial down to the 3 day chart, you can see a valid uptrend signal emerging from the recent 'impulsive' leg to the upside. I'm interested in going long the yen in this zone, and aim ideally, for a retest of the dowtrend mode near 0.009875. The time at mode signals, tell me price could stop at 0.009256 or 0.009489, so, take heed of these particular levels, for either a retracement or reversal of this trend. I'd expect the equities to correct the recent advance, in the wake of this yen uptrend continuation, as risk off sentiment takes over once more. The trade: Go long JPYUSD, or short USDJPY, ideally on a retracement, but if not, you can take it at market price and keep stops 1.2%+ away from this week's close. Target a 3 to 10% distance from entry, approximately. Holding time, or ETA to reach the targets is before June 27th. Good luck if taking the trades. Cheers, Ivan Labrie.
Long
by IvanLabrie
5