Eurjpy!
Trading the BoJ meeting – it’s all about YCCTiming – 31 Oct (no set time – likely between 1 pm to 3 pm AEDT)
The tide is turning in Japan and while BoJ policy change is glacial - especially when we consider the intense pace at which other G10 central banks have acted – we’re now hearing that Japanese pension funds are looking are re-weighting of domestic JGBs, with yields on long-end bonds more attractive than holding foreign bonds on a currency-hedged basis.
These future re-weightings will involve huge amounts of capital and increase the perception of JPY inflows, and a lasting process of capital moving back to Japan.
On the inflation front, we’ve seen Tokyo core CPI coming in line, or beating expectations, in all but 2 of the last 24 readings. With core CPI running at 3.8% and well above the bank's target of 2%, we’ll see some lumpy inflation upgrades tomorrow from the BoJ.
So why not start to tighten policy? The simple reason is they haven’t prepped the market fully, and they want to garner real confidence from the Spring Shunto wage negotiations – we should start to hear the outcome of these negotiations in the weeks ahead.
All eyes on changes to the YCC band
While no one is expecting a move in interest rates away from NIRP (Negative Interest Rate Policy) – that is an early 2024 story - Where we could see some policy change through the widening of the YCC (Yield Curve Control) band. At present, the BoJ cap 10yr JGB (Japan govt bonds) yields at 100bp (or 1%). If we were to see a test of the 1% cap in the near-term the BoJ would buy unlimited amounts of JGBs to confine yields to 1%.
Currently, we see the 10-year JGB at 89bp, with yields up 14bp since 16 October. So, sellers have pushed JGB yields towards the cap, with the more freely moving JP 10yr swap sitting above 1% at 1.10% - it’s, therefore, clear that some in the market has positioned for the BoJ to lift the cap to 1.50%, some may even be thinking it's removed altogether.
The market’s base case is for no change
While 34/45 economists expect no change, given the recent flow and positioning in the JGB market, if the YCC cap remains at 1% then we could see a spike higher in USDJPY and the JPY crosses – I would guess to the tune of 30-50 pips. I would be a buyer on that JPY weakness.
This fits in with the reaction we’ve seen in prior BoJ meetings, where since Jan 2022 the JPY has weakened in all but 2 meetings.
Could we see the cap lifted to 1.5%?
If the BoJ lifts the cap to 1.5%, one suspects this action will be accompanied by supportive rhetoric that they will continue to intervene intraday and buy JGBs to smooth out any overly violent moves. This action would see a more pronounced downside move in USDJPY, perhaps 50-70 pips (at a guess), although the likely accompanying language should limit the reaction.
As always, positioning will play a part – where we currently see leveraged funds short of JPY, while real money is modestly long, and retail aggressively long JPY and seeing greater downside risk in USDJPY.
One does question why the BoJ doesn’t just get rid of the YCC cap altogether. A scenario which isn't entirely impossible, but would likely send shockwaves through global bond markets, and by extension FX markets too. One could argue that YCC lacks credibility anyhow, given the BoJ seems to move the cap every time the market tests the limit. It simply results in them having to buy greater quantities of outstanding debt and cornering the market.
The trade?
Over the coming week or so, I see further upside risk in the JPY - My preference for the BoJ meeting though is to stand aside, but place limit sell orders above the market into the meeting. If the BoJ leaves YCC unchanged then positioning should be unwound and I get a fill - I suspect the move will be short-lived and the flow should reverse. CHFJPY is looking like one of the weaker crosses at this point, so selling spikes in CHFJPY looks compelling – and should we get closer to MOF verbal intervention I am on the right side of that too.
EURJPY - Bearish Scenario 📉Hello Traders !
On The Daily Time Frame, The EURJPY Price Reached a Resistance Level (159.761 - 159.324).
Currently, The Price Formed an Ascending Channel.
We Have a Bearish Scenario 📉
If The Market Breaks The Support Line and Closes Below That,
I Will Sell On Retest...
TARGET: 31950.0🎯
CHFJPY I Potential long from supportWelcome back! Let me know your thoughts in the comments!
** CHFJPY Analysis - Listen to video!
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EURJPYEURJPY is trading in bullish parallel channel, and created Head and Shoulder pattern at strong resistance area. And a massive sell rally break the neckline of HnS pattern. any successful retest of broken level will be nice option to sell.
if the sell pressure continues, the next target could be the back to lows at 157 region.
What you guys think of this idea ?
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Strifor || XAUUSD-10/27/2023Preferred direction: Neutral
Comment: Gold is also on balance at 1981.683, foreshadowing future gains. However, most likely this is more about the medium-term vision. In the shorter term, the instrument will maintain its presence in the balance sheet. there is an assumption of a slight increase, thereby leaving the balance, and then returning to it again.
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Strifor || USDJPY-10/27/2023Preferred direction: SELL
Comment: The climax at level 150 continues. The Japanese regulator is actively intervening in the market to support its currency. Because of this, trade is weakened. The general trend towards shorts continues, but this, as we said, is a gradual increase in shorts. The candlesticks formed on currency intervention are expected to approach the minimum soon.
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Strifor || EURUSD-10/27/2023Preferred direction: BUY
Comment: Trading continues at the level of 1.05700 for the currency pair. The probability of a fall remains and it is greater than assumptions about growth. Most likely, a false breakout will be formed upward at this level and after that the price will go down.
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Strifor || EURUSD-10/26/2023Preferred direction: SELL
Comment: Saving the ECB rate at its previous value was not a surprise; the market reacted calmly, but statistics from the United States, which exceeded all expectations, on the contrary, forced the market to move. Against this background, the euro continues to weaken, and technically, the strength of the US dollar can also be seen.
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Daily Wave Rider - EURJPY - BUYEURJPY
Channel: GREEN
WK Pivot: GREEN
AOB: EMA10
CON: SBB
BUY Stop: 158.970
Stop Loss: 158.398
TP01: 159.542
TP02: 160.686
DWR present as a buy setup on 26 OCT, with Channel and Pivot are green bouncing off EMA1-
However, trade is not taken/considered
SPX500: SELL
DXY: BUY
OIL: BUY
GOLD: BUY
TradePlus-Fx|EURUSD: seller liquidation💬 Description: The currency pair stood at the level of 1.06745 , which is resistance at the moment. In addition, a lot of interest has recently accumulated at this level, which has been distributed downward. The significance of this current price area is great.
I assume that the instrument will come into balance at this level to accumulate positions and "eating" away volumes in the past. Thus, we calculate a rollback to the level of 1.06350 . You can enter from this level, but be prepared to re-enter if your stop-loss is triggered. It's best to build up the pose gradually. The purpose of growth will be to eliminate sellers who now want to trade in the direction of the trend. The level that buyers will strive to reach is 1.07500.
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EURJPY: BoJ continues to buy bonds irregularly to restrain the rOn October 24, the Bank of Japan announced its fifth extraordinary purchase of government bonds since adjusting its yield curve control program at the end of July.
Despite these efforts, Japan`s 10-year bond yield continued to hit new highs this month, adding to the global stock market decline.
"However, there is still speculation about the Bank of Japan's policy adjustments, making it difficult to recommend bond purchases. "
The Bank of Japan's ultra-easy policy also contributed to the yen's depreciation, making it the weakest G10 currency this year.
TradePlus-Fx|EURUSD: new plan💬 Description: The evening trading idea for the Euro has undergone some changes, and now it is probably best to look at selling again. Pressing towards the daily support level of 1.05194 will most likely implement sellers’ immediate plans to eliminate buyers’ stop losses, which are located below this level. There is a good target ahead for implementing the expected downward movement, namely the support area at the level of 1.04400.
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EURJPY to find support at previous resistance?EURJPY - 24h expiry
Although the bulls are in control, the stalling positive momentum indicates a turnaround is possible.
We are trading at overbought extremes.
A lower correction is expected.
Short term bias has turned positive.
We therefore, prefer to fade into the dip with a tight stop in anticipation of a move back higher.
We look to Buy at 158.95 (stop at 158.45)
Our profit targets will be 160.15 and 160.65
Resistance: 161.25 / 162.00 / 163.10
Support: 158.60 / 157.70 / 157.05
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EURJPY: Time to Buy 🇪🇺🇯🇵
EURJPY broke a solid horizontal resistance.
Retesting the broken structure, the price formed a tiny horizontal range on a 4h time frame.
Its resistance breakout is an important sign of strength of the buyers.
A bullish movement is expected to 159.4 / 159.7 levels now.
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Strifor || GBPUSD-10/23/2023Preferred direction: Neutral
Comment: The pound is also taking advantage of the momentary weakness in the dollar and is recovering slightly against this background. The price will most likely reach the level of 1.22370, at which we will most likely have to wait for the short entry point again. However, the second scenario is also not excluded, in which the level will be broken upward. But even in this case, the priority of sales is stronger, thus we can assume the formation of a false breakout and the resumption of the fall in the direction of the medium-term trend.
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Strifor || EURUSD-10/23/2023Preferred direction: Neutral
Comment: The US dollar started the week with a correction and against this background, competitors began to grow. Special attention, as always, to the Euro. Here the price will approach the level of 1.06318 in the very near future. There's an obstacle waiting for buyers there. As you can see, the medium-term trend remains bearish. Therefore, for now, at the level of 1.06318 one can presumably expect a potential entry into shorts.
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TradePlus-Fx|EURUSD: mixed success💬 Description: The dollar , after all, retains the initiative in the market, but its competitors also have mixed success. We will designate this as a success, since intraday movements in favor of competitors are quite significant and for a trader this is a potentially good profit.
At the moment, the instrument is creeping up again to the level of 1.05194, which acts as support. Short-term trades, as always, are considered in both directions. Regarding longer-term trades, we can most likely expect the price to go to 1.06350 in the very near future. At this level, there is a significant number of sellers’ stop losses; against this background, one can expect an upward impulse. Most likely this will be a false breakout, but we will know for sure a little later.
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EURJPY Trading IdeaBased on Simple Technical Analysis ( Trendline + Support & Resistance )
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Please be advised that I am not telling anyone how to spend or invest their money. Take all of my analysis as my own opinion, as entertainment, and at your own risk. I assume no responsibility or liability for any errors or omissions in the content of this page, and they are for educational purposes only. Any action you take on the information in these analysis is strictly at your own risk. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Good luck :-)