Prime Target: Carry Trades - except for the USDJPY!Sure, the Yen is overly weak on a trade-weighted basis BUT it is the least weak versus the USD!
E.g., For any intervention to be effective it ought target just about any other high yielding spread/pair EXCEPT for the USD!
Having established that, it is still far more likely that any intervention would target the USD/JPY directly than the rest, if for no other reason but for its success last September (2022). (Last September, dollar longs were extremely overcrowded which amplified the effects of that intervention, and then most of the cash went into carry trades.)
Times have changed, though, whether the BoJ will be willing to subscribe to that notion or not. (which is yet to be seen).
OK, so where does this potential paradox (or rather, just a dichotomy? ;-) leave one, in trading terms?
1) If there ever was a right time to trade the Japanese Yen against a basket of it's counterparts, now would be it! (Work has almost completed on just such a basket this time with correct weighing. ;-)
2) FX options (especially Gamma changes) have been gauging the potential market effects of the BoJ's various jaw-boning attempts (most of which were summarily ignored by the markets) in support of the Yen, rather accurately. "If it ain't broke don't fix it." Stick with it!
p.s. The CHF/JPY is a special case here (not quite a carry trade) as it's eye-watering rise is due to the same, deranged SNB policy which ended in tears, back in 1978-79. (... Switzerland slipping into a far deeper depression than it's trading partners, back then.)
CNHJPY
CNHJPY - SHORT; This pair is ready to fall off a cliff!Considering China's (ongoing!!) predicament caused by an oncoming, abject, demographic (urban, industrial) collapse, the obvious consequence is a stand-alone Japan's as the region's only remaining super power" ... Making this Short a no-brainer, probably well over a decade and a half.
The Long Term Price Target on this pair is: 10! (I.e. a >50% Decline ...,
... provided that there will be still such a thing as a convertible (off-shore) Yuan, further down the road - which, in itself, is very unlikely!)
CNHJPY 30th APRIL 2022Based on the COT reports released today, focusing on CNH and JPY CME Contracts, it can be seen that bigboys interest accumulated 73.2% renminbi long contracts and 20.7% renminbi short contracts . As for the Yen , they still tend to short contracts 46.1% which is much more than long contracts which are only 6% . It can be concluded that the big boys sentiment for the CNHJPY pair still tends to be bullish .
Technically, we can see that in April 2022 there was a bullish flag which was followed by a bullish pennant . Possibly in early May trading there was also a similar pattern . The bullish flag pattern is clearly formed, however, the continuation bullish pennant pattern has not yet been formed and possibly will be formed .
CNHJPY - SHORT; Start SELLing it for good!Whom do you trust anyways, the Commie Chinese or "kamikaze Kuroda"??... When push comes to shove Ol' Kuroda is still the right bet. (And it's about to come to that, sooner rather than later.)
All "fundamentals" aside, this is one of the most lopsided carry trades out there. (If not The Most...) That alone is deserving a massive sell-off here, about the size of Montana.
Forex lovers❤️Hurray... wolves🔥
There is an ascending triangle on CNHJPY.
There was a strong bullish sentiment before.
Now it seems like possible breakout of resistance zone has been done.
Follow the chart and look for the best price to enter carefully.
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Carry Trades, Margin Rates and all the FakesFor some strange reason the retail trade still appears to believe that the good old stand-bys are working as carry trades" ( AUDJPY , NZDJPY , GBPJPY , etc.) The fact remains that today, those don't even make the Top 5 of professional traders' (e.g., the industry) preference list.
Interest rate differentials combined with existing margin rates make most of the majors crosses a very unappealing proposition as far as carry trades are concerned. Because of this the industry has moved on, quite some time ago. (As is the nature of the present, speculative bubble.)
As for the top 5 of the majors, it's mostly about the US Dollar ;
1) USDCHF
2) USDJPY
3) EURUSD
4) NZDCHF (This one is likely to drop a few places, soon.)
5) CADCHF
Then, there is the rampant "interest" (i.e, speculation) in all things BRIC vs. G10, for reasons which should be self evident. (Interest rate differentials, capital flows, etc.)
I.e., MNX, CNH , BRL , ZAR , TRY versus the EUR, JPY and the USD.
Thus, if one happens to be looking for volatility and low-hanging fruit out there, these FX pairs are deserving a fresh look. (They are volatile, though thus, be prepared!)
Here is the "Central Bank Score Board";
------------------------------------------------
- Swiss National Bank -0.75%
- Bank of Japan -0.10%
- Federal Reserve 0.00%-0.25%
- European Central Bank 0.00%
- Bank of England 0.10%
- Reserve Bank of Australia 0.10%
- Bank of Canada 0.25%
- Reserve Bank of New Zealand 0.25%
- Central Bank of Brazil 2.00%
- Reserve Bank of India 4.00%
- Reserve Bank of Russian Federation 4.25%
- People's Bank of China 4.35%
Bearish for CNHJPYBearish for CNHJPY, Analyze by. Preetinder86
CNHJPY right now at channel down after success break Head and shoulders pattern.
to follow downtrend, sell at trendline resistance will be a great idea, with stoploss around fibonacci 236.
tne best profit position at fibonacci 618 at 16.362
Yen TWI chart: Bearish continuationWe have a very clear setup with the market rolling over after hitting an options expirations key level, since the Yen pairs soared due to Bernanke's helicopter money suggestion to Kuroda. In this chart you can observe the trade weighted index chart behavior, to more clearly illustrate the true strength in the Yen, clearly, this year's top investment, closely tied with precious metals and mining company's shares, and to a lesser extent bonds.
I reccomend going long the Yen, pick your desired instrument, give it enough breathing room and let it run. We seem to be ready to resume the downside push with force. Hold on tight!
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JPYCNH Gartley formation, enter now or wait - up to youI think that either one of the two price movements are completely viable.
The blue line is the 0.786 and 1.272 confluence region, so if you want to enter based on the confluence then short this now since it has already reached this area a few days ago.
Alternatively, if you would prefer to rely on the market meeting the 0.786 retracement as an entrance point, short at 0.058403. I personally will wait until the market meets the blue region again.
I have extended my usual profit target due to the market trading a range in a consolidation area at the moment.
CNHJPY 1hr 1month wedge breakout to the upsideSimilar to the NZDUSD breakout play; we have consolidation along the upper edge of the wedge. This is a clear indication of impending breakout to the upside.
When the price hits that first moving average we will move the stop up to break even to lock in potential losses.