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Dont get too excited Bulls - USDJPY DXYOverview - Sentiment immediately changed (...again... I know) from extreme bearish to excessive bullish from traders as we reverted back to the top of the channel. This is especially true in the USDJPY pair. The index and the USDJPY is still clearly in a downtrend. Unless you are eager to get ran over by the heavy weight greenback, I urge for confirmation before letting a recent upswing to cloud ones judgement. The last few weeks have been a grind of emotions with dollar bulls (myself included). With the current charting conditions, I would urge those to remain unbiased going into next weeks regardless of upcoming news. Technically Speaking - In the dollar index, we are still clearly in a downward trending channel. The bottoms we have attained since January 23rd have been successively less extreme, rising off the bottom channel. This may be the start of a new trend as we see the bottoms starting to round, however it is likely to be more of a fake-out than a trend reversal. In the past few weeks, each time the price broke above an RSI reading of 55, a sharp reversal occurred typically at the top of the channel. As you can see, we are trending just below it after a number of failed attempts to hold. Additionally, for those who are window oriented, there is still an open gap in the DXY around 99, indicated by the thin yellow box in the top chart. USDJPY Index Divergence - In a previous published idea, I mentioned that it was not a good time to have a new long entry in the USDJPY as I warned of a potential H&S that successfully played out. That was when USDJPY was trending around 115 and before it flushed under 113 that week. It is starting to look good for the pair, a double bottom, what looks to be a higher high off the most recent pulse, and price action that is diverging positive for Dollar bulls. The downward channel in USDJPY is clearly broken and it is clear that the the Yen is depreciating since January 13th when comparing the peaks and troughs. This is great for the pair, but the dollar is still in a downtrend and is likely to reverse here again in the near future and give a better entry. There is also big news this week from the BOJ and the FED that is likely to shape how the Yen and the USD behave in the following weeks. ***Being long/short the Yen pairs going through the BOJ meetings may be self-destructive if the meeting results are not up to standard. What I'd like to see - As mentioned before, this has been a slow predictable downtrend in the dollar. What I would like to see to signal a trend reversal would at least be a sharp flush to the downside followed by a sharp rejection and counter trend move. Whether that be to close the gap at 99 or not, we haven't seen this happen yet as it tends to happen before a trend reversal. The above is not investment advice for a real account, but my own trading journal that I am sharing. I am not a licensed professional and am not selling anything. Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience, and risk appetite. Most importantly, do not invest money you cannot afford to lose.
TVC:DXYShort
by hankle
1
SHORT USDJPY - STRAT TRADE: 99.4% PROBABILITY OF REVERSALSHORT USDJPY: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) USDJPY has a cumulative probability of a =>7th day lower at 0.6%, hence there is a implied 99.4% chance of reversal on the daily. 2. Technically there is also some nice structure about the 103 level. Trading Strategy: 1. Sell USDJPY at market in 1xlot, and add 2x on each daily close higher from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower (it could be several days). TP is the next/ First daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
by QuantumLogicTrading
14
SHORT USDJPY - STRAT TRADE: 99.4% PROBABILITY OF REVERSALSHORT USDJPY: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) USDJPY has a cumulative probability of a =>7th day lower at 0.6%, hence there is a implied 99.4% chance of reversal on the daily. 2. Technically there is also some nice structure about the 103 level. Trading Strategy: 1. Sell USDJPY at market in 1xlot, and add 2x on each daily close higher from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower (it could be several days). TP is the next/ First daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
Short
by QuantumLogicTrading
USDJPY - EDGY BOJ TURNS YEN TURBULENT; KURODA SPEECHUSDJPY: 1. Price action immediately following BOJ this september was more than erratic but at the same time showed some consistency for those of you who can remember back to Julys performance - we moved instantly lower on the decision to 101 flat, before ripping 180pips higher to 102.8 to then lose most of the bids and trade back to the 101 base. 2. The BOJ decision itself, imo, was less than clear compared to July though and almost warranted this kind of whipsaw behaviour - especially given the anticipation (or not so much) of the Fed later today which is likely to mingle with risk sentiment and dollar leg of USDJPY the like at some point. - The unclearness regarding whether the policy decision was net hawkish or dovish was given that there was no changes to the main policy tools (Depo, LSP, JGB, ETF), it would leave one thinking neutral-hawkish on expecttions - especially given a 5bps cut was the median BBG forecast. However, on the other hand, you had statements from BOJ including, "BOJ expanding its monetary base until it reaches its 2% inflation target" which is somewhat dovish given it puts never ending monthly JGB 80-100trn yen on the table for the next few years (unless the BOJ is delusional that less time is required). But at the same time this dovish statement was met by a bid from the BOJ to "increase yields for 10y JGB to 0%" and steepen the curve - which in itself is highly contradiction of ANY further expansion to the monetary base (given increases in money supply reduces rates). The BOJ knowing this then went on to cover saying "pace of purchases may fluctuate as to meet 0% target". Thus all in all the above, for me at least, left the overall decision uncertain at best. Given we are only 0.2% down it would be fair to say the outcome was infact neutral. Neutral BOJ and No hike Hawkish Fed was my prediction before (see attached) and i stand behind the 100 level being reached as USD demand is likely to be flushed at some level when the 10-20% priced into USD fed funds is flushed out. BOJ Decision: JAPAN BOJ RATE DECISION STAYS FLAT AT -0.1 % (FCAST -0.1 %) VS PREV -0.1 % BOJ DECIDES TO SET TARGET FOR LONG TERM INTEREST RATES JAPAN BOJ BASE MONEY TARGET STAYS FLAT AT 80 TLN JPY (FCAST 80.00 TLN JPY) VS PREV 80.00 TLN JPY BOJ: ADOPTS QQE WITH YIELD CURVE CONTROL BOJ: TO ABANDON MONETARY BASE TARGET BOJ SAYS NO OFFICIAL BASE MONEY TARGET, BUT MAINTAINS ANNUAL PACE OF JGB BUYING AT 80 TRLN YEN BOJ: TO KEEP BUYING JGBS SO BALANCE OF ITS HOLDINGS INCREASES AT ANNUAL PACE OF 80 TRLN YEN BOJ: INTRODUCES NEW MARKET OPS FOR YIELD CURVE CONTROL BOJ: TO BUY JGBS SO 10 YR YIELD HOVERS AROUND 0 PCT BOJ: PURCHASING YIELDS WILL BE SET PER AUCTION BY INDICATING THE SPREAD FROM THE BENCHMARK YIELD WHICH BOJ DETERMINES SEPARATELY BOJ: DEPENDING ON MARKET CONDITIONS MAY SET JGB PURCHASE SIZE PER AUCTION TO FIXED AMOUNT OR UNLIMITED AMOUNT BOJ: SCRAPS RANGE FOR DURATION OF JGBS THAT BOJ BUYS BOJ: BOJ TO CONTINUE EXPANDING MONETARY BASE UNTIL CPI EXCEEDS 2 PCT AND STAYS ABOVE TARGET IN STABLE MANNER BOJ: ADOPTS COMMITMENT TO LET INFLATION OVERSHOOT ABOVE 2 PCT BOJ: BOJ CAN CUT SHORT TERM POLICY RATE, TARGET LEVEL OF LONG TERM RATES IN FUTURE EASING BOJ: BOJ TO CONTINUE EXPANDING MONETARY BASE UNTIL CPI EXCEEDS 2 PCT AND STAYS ABOVE TARGET IN STABLE MANNER BOJ: BOJ MAY ACCELERATE EXPANSION OF MONETARY BASE AS FUTURE POLICY OPTION BOJ: PACE OF MONETARY BASE INCREASE MAY FLUCTUATE IN SHORT RUN UNDER MARKET OP THAT AIMS TO CONTROL YIELD CURVE BOJ: MAINTAINS COMMITMENT TO ACHIEVE 2 PCT INFLATION AT EARLIEST DATE POSSIBLE BOJ Kuroda:
Short
by QuantumLogicTrading
Will Kuroda Sink The Yen in his speech in a few hours?USD/JPY opened higher than the Friday close to a small retracement in it's initial hour and price is now trying to push high (hourly view) with a wick formed above today's open on the next candle. Markets could be primed for the Bank of Japan Chief Kuroda who is due to speak in the early hours of Monday and as per recent speeches he will likely be seeking to manipulate Yen strength to support Japanese exporters. Let's wait and see what happens, the position here is long USD/JPY.
Long
by Elliot_Myers