Boj
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.
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.
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
bullish divergence in USDJPY H1 long to 110.500 0.23 fib retracebullish divergence in USDJPY H1 long to 110.500 0.23 fib retrace
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.
Out of the ashes?This week is clearly a fundamental one. If BoJ maintains dovish measures and FED surprises with a renewed hawkish tone, we may see the US dollar climbing back to a transitional zone.
Demand for Gold Rockets HigherIs the once Goldman Sachs "slam dunk sell" turning into a layup buy?
I cannot hate the initial call from many investment bank analysts it to sink to $1,000 because, in 2013, I issued a $1,035 bear-call. However, I do ridicule these analysts for unwillingly (either through ignorance or moral hazard) understanding the dynamics of gold.
But in 2014 I turned rather bullish on the precious metal. As readers know, I developed a hybrid approach: bullish on physical bullion while understanding that prices are sentiment drive. It was hard to deny that the longer-term fundamentals for gold were strengthening between global stagnation and misguided central banking policies.
Despite central banks, primarily the Federal Reserve, trying to fill in the ever-widening gaps via patchwork, market participants remains highly negative up until late December.
This year, traders saw absolute carnage for risk assets and the strongest demand for gold in years. GLD has seen massive inflows, only second to SPY. IAU has seen inflows everyday this year. The demand has been so strong, BlackRock (which manages the iShares Gold Trust) suspended share issuance.
Secondly, inflows to both popular gold-backed ETFs have not been this strong since the SPX fell 18 percent and the Federal Reserve were mere months from starting quantitative easing in 2009. And, we know what happened after that.
Now, the recent move will likely remain volatile as gains on consolidated and traders buy on pullbacks. As you can see in the weekly chart of GLD, the entire move from 2008 to 2011 remained in demand to overbought. If the fund sees a similar nominal gain over the next couple years, traders could see $2,230 for spot gold prices.
Considering that the top three central banks have gone over the deep-end to appease risk assets, we could be seeing a resumption of the gold bull market.
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Will the BoJ Increase QE In Two Weeks? Doesn't Matter.With markets on edge and Japanese inflation data this week, those short the yen are hoping the Bank of Japan Governor, Haruhiko " Kamikaze " Kuroda, will further increase the balance sheet through more quantitative easing. Because when everything else fails, he'll try to go all in.
Or will he? Essentially, his brilliant idea to implement negative rates, or NIRP, was seen as a policy error even quicker than the Fed's first rate hike in seven years. Economists, bulls and bears alike, said that NIRP would do absolutely nothing for the Japanese economy. But, Kuroda didn't go from no NIRP to NIRP in a week's time to strengthen the economy. It was to deter yen strength and perk up hemorrhaging risk assets, which failed miserably.
If inflation data comes in soft, we are likely to hear the threat of quantitative easing but it is unlikely that the BoJ can match the most bang for the yen traders saw when this whole quasi-policy began. Analysts expect that Kuroda may increase the level of exchange-traded funds, a market where the BoJ already owns 52 percent , since there is virtually no more debt to purchase do to existing quantitative easing measures.
It's possible, but does not matter in the end. The global marco downturn is in the drivers seat, and a single central bank cannot change that, especially when $12.3 trillion in QE and 600-plus rate cuts since the financial crisis have barely kept the global economy spuddering along.
With global trade continuing to collapse, the weak yen facade is crumbling. January's exports fell a whopping 12.9 percent and imports dropping 18 percent. GDP contracted 1.5 percent in 2015 on an annual basis, and Japan has seen three recessions since PM Shinzo Abe took over in 2012.
External debt and the BoJ balance sheet hit all-time highs (unlike the Nikkei) .
Those nickel-and-diming headlines - be careful. As we've seen in February alone, the actions of the BoJ erased nearly eight months of gains.
Do macro, or macro will do you HARD.
I reiterate a target of 110 by Q3 and 105 by early-2017. That will likely be for starters if the US falls into recession, as forecasted . Potential pullbacks to 114.55 and 116 on central bank induced risk taking probable.
The problem with this crusade for inflation, and this goes for all central banks, by reckless measures is fiscal calamity will arise when inflation takes hold. Rates will have to increase, and debt will not be payable.
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Implications of Risk (CAD, WTI and Bonus Chart)CADJPY has been setting up to become a great selling opportunity on a macro-standpoint for the following reasons:
I was looking for a drop well-before today's action:
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Fundamentals in a nutshell:
CAD is highly correlated with WTI crudeoil, both on a fundamental and technical level. There still is no tangible catalysts to cause a significant rally in oil prices. Perceived catalysts have yet to amount to anything substantial. Still, there is no producer willing to cut production as of yet. Furthermore, the macro outlook for Canada is continuing to look like a poor one.
JPY is a proxy for risk, which is signalling further turmoil in risk assets, and the correlation of such assets do not bode well for oil prices. Despite BoJ's meandering into NIRP territory, it has been dubbed a policy error almost as quickly as the Fed's single rate hike in seven years. Japan's Finance of Ministry may call of 10Y auction of bonds for the first time ever on fears of negative rates.
Still forecasting the US business cycle ending, with a recession in 2016. As with my previous Russell 2000 posts (correct but early!), small caps are supporting the "FIFO" what it comes to domestic economic weakness. Still see a bear market in US equities.
Technicals in a nutshell:
Price action rallied hard from an oversold position on two fronts: the rumor of a Saudi-Russian deal to cut production (which was refuted by Saudi twice), and the BoJ's decision to cut rates (which occurred as crude stalled). Clearly, if the production cut rumors amounted to something more than talk, clearly that is bullish. However, we must look at it as what is happening and what may happen (from highest probability) and not what we want.
The price action on the daily stalled within a long-term demand zone as both positive price action (+DMI) and ADX continued to slope downward. RSI is well out of oversold territory, which gives traders room to continue selling post-squeeze.
The stochastic indicator is giving a great sell-signal on the daily chart.
Note: indicators on tradingview do not mirror those on my MT4 but are close. I use a 9,3,3 on stochs.
BONUS CHART:
USDJPY, essentially risk appetite, is trending lower on the monthly chart (this particular chart I made last month but decided to show my awesome readers!).
If global fundamentals and aversion to risk occur as I believe, we could see 110 this year. I expect their will be more yen strength even as the dollar remains supported.
As I noted when I was on Dukascopy TV in 2014, the Bank of Japan is running out of "tool," as was unlikely to further increase QE. Moreover, traders would loose their faith in central banks and their ability to prop up markets. We're seeing that now.
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Wait for a BIG SHORT on EUR/JPYAs the graph analysis can show the pair has been trending in very nice downside trend-channel since June 2015 and the levels provided by the Fibonacci retracement, which I have applied from the peak of December 2014 to the low of April 2015 (around 126.100), seem to offer relevant level of support/resistance.
I personally entered in a long position on 11/01/2016 from 127.00, which represents the bottom of my trend channel with target 130.000 ( NEVER BE TO GREEDY WHEN YOU GO AGAINST THE TREND) taking a nice +2.40% on January 28th.
However what I am really looking for is to go short at the top of the trend at 133.000 which is a really strong level for 3 main reasons:
1)psychological level (round number)
2)top of a downside trend-channel
3)consistent support/resistance level throughout 2015
As we can see around 132.000 we also have the 75% level of the Fibonacci retracement which represent another good resistance level. Thus my personal recommendation is to enter the short position around this 132.000 level with a not too big order and then wait and see whether the pair will reach the 133.000 and then enter a bigger short position. From there a reasonable target will be the bottom of the trend, just about 126.000 which will represent for sure a very important support level since it is also the lowest point the pair reached since 2013.
From the point of view of fundamentals, the recent cut of B.o.J. in the rate at which banks can deposit their excess in reserves, which just became negative -0.1%, in order to try to keep up with inflation, will probably lead to a depreciation of the JPY which would be very nice for my strategy.
Long USD/JPY (12 hours to go until central bank meeting)Japanese central bank is announcing the rate decision and commentary regarding monetary easing in just over 12 hours.
The USD/JPY has rebounded from the 116 lows and looks to continue upwards trend.
There are fundamental reasons we should expect Yen to weaken:
Taro Aso (Japanese Finance Minister) has changed his cautious rhetoric from scepticism regarding monetary easing to acting "without hesitation".
Inflation rate was at 0.3% in December, barely avoiding negative values.
That is while the target is at 2%. And achievement in 2014 creates pressure to turn around 2016, so that 2015 inflation dynamics are not repeated.
Potential rebound of oil prices may not help inflation figures, but its unlikely that Japanese central bank will rest its hopes on that fact. Should central bank fail to introduce any measures we could see the cross trading sideways in 116-119 range waiting for action from Fed or BOJ.
It is most likely that trading will be range bound until the meeting, but if 119 is to break we are likely to experience buy the rumour, sell the fact scenario.
Descending triangle on CHFJPY chartA descending triangle has just formed hinting for a continuation of that bearish trend. According to fundamentals the swiss franc is facing a very weak period with surprisingly low retail sales data, compared to japanese yen benefiting from a positive balance of payments. Price should target the first meaningful support level around 115.50.
USDJPY: At the crossroadsWe have many interesting elements in the USDJPY chart.
The monthly time at mode uptrend expired and triggered a violent short which I took and published here.
This still demands possible downtrend continuation towards the monthly mode at 101-102 in the coming months.
The interesting point is that the weekly has an active uptrend signal with time left to hit the not too ambitious target at 126.067 but this could also loom the possibility of a new 11 month uptrend from this juncture.
I have a short position open, with a break even stop, entered in a bold manner, when approaching the weekly resistance at 123.55. In case the downtrend were to continue and confirm the 12 week decline, I'll add to shorts to increase my profits from this massive decline.
In case I get stopped, I'll look into taking a long position, since this could be a very large long term trade.
If you want more information in managing positions like these, and the way I'm approaching FX trading, contact me or Nicholas Coulby (ncoulb1) here, we're running a trading room chat via Skype, providing timely trade signals and coaching for a monthly fee.
Kind regards,
Ivan Labrie
Time at Mode FX
Dollar Pulls Back on Dovish Minutes, BoJ Standstill Dollar-yen bulls may be forced to take pause after central bank decisions, from each respective currency, give traders something to chew on:
The FOMC minutes yesterday were nothing short of redundant. I am beginning to think it is the same speech month-after-month, but financial outlets took whatever they could to spin it as hawkish as possible.
That should have been good news for the dollar, but if one were to actually take the minutes in context then one would see that the Fed is still on the fence. The camp still remains divided, and some official suggest a December rate hike “may” be appropriate with a mere four weeks till the next meeting.
The backdoor of data-dependency still remains, so if the Fed does not want to hike in December then they have a myriad of recessionary and deflationary data to choose from.
I proposed a simple question on social media: “If traders really thought a Fed hike is in play, why's the dollar down, stocks up? Wasn't that way after October FOMC.” After the October minutes were interpreted to be hawkish, the dollar began to rally extremely hard and stocks sold off. But, I digress.
Across the Pacific, in a faraway land where debt-to-GDP is approaching 300 percent, Japan’s policy minutes showed that the Bank of Japan (BoJ) has decided to not undergo more QE. This was largely expected but still affected USDJPY.
Economists were sad to learn this, following Japan’s fifth recession since 2009. Prime Minister Shinzo Abe’s “three arrows” economic plan is looking like a metaphorical representation for the three recessions under his watch.
BoJ Governor Haruhiko Kuroda did some lip service following the minutes saying the economy was on a “gradual recovery path.” Uh…
Technically, price action is approaching 123, and the momentum is moderate. The +/- DMI is suggesting that if USDJPY continues to trend lower, negative bias on price action would be asserted with a bearish divergence.
Minor trend support will be strengthened with the 50-4H EMA, which is located roughly 122.90. If price action closes below trend support, near-term support is seen at 122.23. However, if the dollar can regain its momentum, 123.70 will be tested. This level also resembles ascending triangle resistance, and a breakout close above this could cause further upside momentum.
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USDJPY: Short now, abysmal targetsI think it's worth it to try a short trade here, aiming to capture the following targets:
Target #1: 116.39
Target #2: 112.95
Target #3: 102.48 (monthly uptrend mode from 2011 to date)
Market sell at the open, place stops for each position at 123.96, and hold the trade until the end of November.
If we don't hit target #2 by then or earlier, and we're not stopped, it might be safer to get out.
Check out Tim West's "Key Hidden Levels Chatroom for more insights on the stocks , bonds, metals, currencies and Bitcoin markets. I'm currently managing a private trading room for Forex , CFD and Bitcoin futures traders.
Contact me for more details on how to join either of the two.
Regards,
Ivan Labrie
Descending Wedge against 38.2% FibToday's open may very well have hit the lows as it took a strong bounce from there.
Other Yen pairs displaying the same price action.
Further confirmation could come from break of upper trend line, aggressive positioning from current levels against the lower trend line. BOJ up this week, could be the catalyst.
Yen index: The yen could see prolonged weaknessThe weekly index chart, with monthly MTPC overlay shows a vivid picture, that of a constantly weak yen.
We are right at a longterm downtrend mode resistance from the historical high back in 2007*, and the last test of it resulted in the start of a very volatile monthly downtrend.
We have this mode resistance as the first obstacle for new highs, as well as the low volume resistance up ahead, in the 135+ region.
The profile balance point for this uptrend sits higher up, at 148.774, so I wouldn't discount the possibility of further Yen weakness in the coming months, backed by a still running monthly uptrend signal with time to spare (price target already exceeded before starting this very volatile and sideways corrective phase) and a very clear and steep weekly uptrend that has time left as well, but with price targets already met ahead of time.
Just keep watch of this chart as you navigate the Yen pair waters.
See comments for the bigger picture view of the whole move from the 2007 high.
My current Yen vehicle is a potentially very large weekly uptrend in the Euro-yen cross. See related ideas for my forecast and trade setup.
Cheers,
Ivan.
USDJPY: Neutral but volatile, Rgmov implies downIn my last chart I analyzed the profile chart in the weekly.
In this installment I depict the interesting levels to monitor in the daily chart .
We have a weekly downtrend expiring on Friday, this is bullish for this pair since it implies that it's possible to retest the mode from where the 10 week downtrend launched, at 124.221.
If we manage to move above 120.084, and break the successive hurdles above, we might be in for a very good risk to reward long trade. Personally, I will wait to short the top, since I'm already long GBPJPY, and I don't want to go long here since it would be redundant.
If this week closes above the mode, we could look for the targets above for potential reversal zones, or each of the low volume resistance levels in light blue, or the range expansion resistance zones in gray.
Entry short would demand an ATR stop, 1.5-3 atr in the daily should suffice, or using the highest high as stop and short under the highest low. Both would work well, potentially. Initial target for a short once the rally is done is a retest of the mode below, and if it crosses down, we might get a new 10 week signal from a lower price, which is very bearish , and would materialize next week if we see range expansion down compared to this week's range, or the next week to that if it detaches from the then lower mode, or expands range as well.
I'll keep updating this chart from now on, good luck.
If you want live updates and more information, make sure to follow me at collective2, where I provide signals for auto trading and via email for a monthly fee.
I'm also providing access to a live trading chatroom free of charge for concordbay.com customers, contact me via skype for more details.
Cheers,
Ivan Labrie
Time at Mode FX
Analyst at Concord Bay dot com
NIKKEI: UPDATEIn my previous idea I located the key levels on chart, and was biased towards a short.
Recently, it started being obvious that the Yen was weakening, so I decided to go long GBPJPY.
I still think the dollar will remain weak for the rest of the year, possibly until June 2016, nothing has changed, but the
Nikkei is implying that it will rally asap. Tim West's recent publication clearly depicts how the stage was set up for a rally, so I'll limit myself to expand the analysis with a few more details of interest that are worth noting. I include the ichimoku indicator on chart, because it's a very highly regarded tool among japanese traders, and many pro traders as well.
It's good to contrast our own analysis with other tools from time to time.
The weekly time at mode downtrend target has been exceeded, and now, time has expired. This implies the Nikkei has a low probability of retesting the mode from where the downtrend launched, at the 20385 mark, in 9 weeks or less.
The daily chart is giving confirmation of a bullish time at mode trend signal today, which aims for the top of the kumo resistance. Interestingly enough, the lagging line, which is part of the ichimoku suite, sits above price, 26 bars back from today. This implies that it's possible for price to cross the cloud resistance and meet with the mode above, or beyond.
Good luck if going long, keep in mind rgmov is in a downtrend in the daily, so I'd still would look into fading the target hit, or the resistances above, or even short under the highest daily low after overbought spikes.
If you want live updates and more information, make sure to follow me at collective2, where I provide signals for auto trading and via email for a monthly fee.
I'm also providing access to a live trading chatroom free of charge for concordbay.com customers, contact me via skype for more details.
Cheers,
Ivan Labrie
Time at Mode FX
Analyst at Concord Bay dot com
USDJPY: Big short in the horizonSimilarly to TLT, I expect a rally to emerge today, which if moving past the trigger level at 122.545 will lead to an advance into the 124.096 to 126.042 area.
I'll attempt shorting the first target with a tight stop, and if stopped I'll wait to short it higher. It's unlikely to see the 2nd target hit, since the 1st one sits right below the 8 week downtrend mode from where the very sharp decline launched, making this an area of high probability for a reversal.
Remember to follow me at collective2 for live trade updates and to receive my Monday, Wednesday and Friday newsletter with detailed intermarket analysis. Currently, I decided to charge $20 per month, until I reach 30 subs. Once that happens, I'll charge $40 per month. So, being within the first 30, you'd be a 'founding member' of the "Time at Mode FX" crew. I placed a link in my profile containing an archive of my forecasting hits in this site, do check it out.
Good luck navigating these murky waters!
Regards,
Ivan.
CADJPY Bearish Probability | H&S PatternTechnical Analysis:
A small Head and Shoulders Pattern is evident on the chart. A break of 91.600 exposes the first target at 90.700.
93.00 has of late proved to be quite the Resistance Level as the pair failed to achieve a daily close above this handle with two notable failed attempts on the 9th and 12th of October daily candles.
It is important to note that this area of price rejection (~93.30) also happens to accommodate the 61.8 % Fibonacci Retracement Level (light blue on chart) drawn from the 97.00 high and 87.40 low. In addition, 92.60 flaunts the 38.2% Fibonacci Retracement Level drawn from the 97.00 high and 87.40 low. This level of Fibonacci confluence , that occurs in an area of structural resistance that has been relatively well-respected, increases the probabilities of a move lower, given the right conditions .
With no higher highs in place the pair is still in a downtrend, albeit ranging as it is sandwiched between the 93.00 Resistance and 91.600 Support as indicated in the chart. Therefore a break, close and price action/fundamental follow-through below 91.600 is what I'm timing and watching for. Stops at 92.00.
If the Weekly Candle closes as a bearish one, a noteworthy Evening Star will be in place. This is usually a Bearish Indicator.
Fundamental Analysis:
OIL Prices heavily influence the Canadian Dollar . The guys over at CFDTrading tackle the recent devaluation here . It's a short YouTube video.
Therefore recent OIL prices devaluation, Canada's seemingly recessive economy and risk aversion vibes (stronger JPY) are all factors that may contribute to a weaker CAD.
As much as Canadian economic data has been improving, there are still inconsistencies with the pattern. Some have been misses and some have been 'good'.
Key Risks:
The Bank of Japan is relatively more dovish than the Bank of Canada, this difference could work in favor of the CAD.
A rebound in OIL prices and/or Canadian Economic Data will see a correlative rise in the CAD.
