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Dominant Currency Sentiment - JPY loses momentumThe market focus remains on JPY and the possibility of intervention by Japanese financial authorities. However, European market participants appear more sceptical. Indeed, ING analysts note: "Never say never. They have been stepping up the rhetoric lately. But I would be cautious about the inevitability of their intervening. Japan is a signatory to the G20 and they have got policies about not intervening." Similarly, the Norinchukin Research Institute's chief economist argues: "My feeling is that the MOF won't intervene at this stage and will leave it at verbal warnings. There's still a week before the Fed's rate-setting meeting. I don't think markets believe the ministry will intervene at current dollar/yen levels." Given the more sceptical stance market participants are now taking, JPY remains firmer on the day but has since lost the majority of its earlier momentum. Looking ahead, today's US economic calendar is light on tier one data, keeping the market's focus tilted towards JPY and the possibility of intervention, alongside broader themes such as the prevailing risk tone. Focus will then shift towards economic data in the following Asia-Pacific session, with the release of New Zealand GDP and Australian employment.
by thunderpips
3
💵Euro/Japanese Yen 💵 Analyze(Short term)!!!⏰Euro/Japanese Yen is approaching the lines of resistance that have been broken. I have shown you the possible next moves on my chart. 🔅Euro/Japanese Yen Analyze ( EURJPY ) Timeframe 1H⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
by pejman_zwin
4
💵New Zealand Dollar/Japanese Yen 💵 Analyze(Short term)!!!New Zealand Dollar/Japanese Yen is running inside the resistance lines. Also, it can make a Bearish AB=CD Harmonic pattern in my PRZ(Price Reversal Zone). I expect that New Zealand Dollar/Japanese Yen will go down at least to the Trend line and support zone. 🔅New Zealand Dollar/Japanese Yen Analyze (NZDJPY) Timeframe 4H⏰. Do not forget to put Stop loss for your positions (For every position that you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Short
by pejman_zwin
4
10 Charts You Must See#10 Mortgages The chart below shows the average single-family U.S. home price multiplied by the 30-year fixed mortgage rate. This chart attempts to show how dramatically higher the financial burden of home ownership has become in the United States. Using a cross chart allows us to better visualize the rate of change. Each cross represents one month. We can see that the current situation looks even more drastic than the subprime mortgage crisis that preceded the Great Recession. Although wages are rising, the rate of change in the cost of home ownership is rising much faster. In this regard, one may conclude that extreme inflation in home prices coupled with a rapidly rising mortgage rates makes every borrower today subprime. #9 Tech Bubble The yearly chart below shows the ratio between tech's performance (QQQ) and the performance of the S&P 500 (SPY). Notice that in 2020 and 2021 tech tried but was unable to close above the peak before the Dotcom Bust. Tech stocks then crashed in the first half of 2022. Take a look at the yearly (or semi-yearly) Stochastic RSI oscillators in the series of relative charts below. Could these charts suggest that Microsoft is about to underperform the Nasdaq for years, that the Nasdaq in turn may underperform the S&P 500 for years, that the S&P 500 in turn may underperform Gold for years, and that Gold may underperform U.S. Treasuries on the 6-month timeframe? Using oscillators in this manner is limitedly valid but one may ponder what these charts say about the future. A shift of investment allocation in this manner typically occurs during a financial crisis. For those who may not already be familiar, check out Exter's Pyramid below. During financial crises market participants typically flee the riskier assets near the top of the inverted pyramid due to these assets' vulnerability to default. Simultaneously, market participants accumulate the more secure and tangible assets lower on the inverted pyramid. This is not a trade or portfolio reallocation recommendation. The QQQ/SPY chart is adjusted for dividends. The GOLD/TLT chart is on a 6M rather than yearly chart merely because not enough data exists to generate a Stochastic RSI on the yearly level. #8 Japan's Debt Although what you see below may look like a single chart of a bell curve, it is actually two charts placed side-by-side. On the left side is a quarterly chart of the balance sheet of Japan's central bank. As you can see, the amount of Yen on the central bank's balance sheet is trending up toward one quadrillion. In contrast, on the right side is a chart that shows the amount of gold that each Japanese Yen can purchase. As you can see, the amount of Gold that a single Japanese Yen can purchase is quickly approaching zero. Smoothened moving averages were used to generate these charts to simplify and enhance the visualization of trends. #7 Crypto Winter The below yearly chart shows the equation 1/BTCUSD, which mathematically represents how much Bitcoin a single U.S. dollar can buy, (or simply USD/BTC). Despite having major “crypto winters” about once every several years, the amount of Bitcoin that one fiat U.S. dollar can buy continues to trend endlessly toward zero (not much unlike the Yen to Gold chart above). The U.S. dollar loses value over time as more and more dollars are created, which must always continue in a debt-based economy. During periods when the Federal Reserve tightens the money supply, the rise in the U.S. dollar’s value relative to Bitcoin is barely noticeable in the chart, even when log-adjusted. Next time someone tells you that Bitcoin is going to zero show them this chart, which technically shows that the exact opposite is more true. This is not trading or investment advice, Bitcoin and all intangible cryptocurrency assets are highly volatile. You can lose a lot or all of your money trading or investing in these assets. #6 Dollar Index As the below chart shows, the dollar index appears be breaking out of a yearly bull flag and breaking above the yearly exponential moving averages (EMA) ribbon for the first time ever. If this trend continues, what economic consequences might this have? The Dollar Milkshake Theory attempts to answer that question: www.youtube.com #5 Shiller PE Ratio The Shiller PE Ratio is often used as a measure of stock market valuation. The below chart shows that stocks are so overvalued that even after one of the worst first halves of the year in stock market history, stock valuations have merely come down to the same level as the peak before the Great Depression. #4 Stock Market Channel The below stock market channel was created by me using a series of regression lines based on standard deviation from the mean price of the entire history of the S&P 500. As the charts show, the S&P 500 is near record levels above the mean even after the selloff during the first half of 2022. #3 Cost of Debt The below chart attempts to illustrate the cost to the United States of servicing its debt (i.e. interest payments). More specifically, the chart shows the monthly rate of change for the equation of total public debt multiplied by the Fed Funds rate (as a decimal). As you can see, we've never seen an explosive jump in the monthly rate of change in debt service to this degree ever since data became available about 55 years ago. This chart was introduced to me by @prd001 . It is unscientific and is a mere thought experiment. For official, but lagging, data you can view the Federal Reserve's data on interest payments (Symbol: A091RC1Q027SBEA). #2 Monetary Easing The below chart attempts to illustrate just how unprecedented monetary easing is. It provides a visual representation of the total assets on the government's balance sheet as a percentage of nominal GDP. It uses the Bank of England's balance sheet because it provides the most reliable comprehensive records since 1700. The chart then superimposes the Federal Reserves' assets (relative to the U.S. nominal GDP) in the present-day to illustrate the fact that at no point over the past 322 years has such a large amount of assets, as a percentage of nominal GDP, been the norm. Monetary easing is therefore a modern economic experiment. How might it end? #1 Climate Change This chart is so consequential that it has led to the creation of a new epoch in human existence: the Anthropocene Epoch. The chart shows the meteoric rise of carbon dioxide in the earth's atmosphere. Here are some video you should watch: Climate Spiral: www.youtube.com Carbon Dioxide Pump Handle: www.youtube.com If there is one chart that all future generations will attribute to everyone living today, it is this.
ECONOMICS:USSFHP
by SpyMasterTrades
18
US Dollar broke out against Japan YenAs you can see in the chart The USD broke the resistance of 135 against the JPY after crossing to the upside the exponential moving average of 377 months which is something that is not usually seen. I will try to enter a long in the retest of 135, with an stop loss at 129.6. For the targets i recommend to keep locking profits and the main target is 175. Clarification: I'm not Japanese so i can not go long in dollars because i would be making nothing, I use this (USDJPY) because I see it more clearly than in JPYUSD. So going long here means opening a short position in JPYUSD at 0.007407 with stop at 0.007716 and main target 0.00571. If you agree give a boost and I will be glad to see points of view in the comments, if you think that I'm wrong tell me why. Regards and happy trading.
Long
by piccard54
💵Australian Dollar/Japanese Yen 💵Analyze (Update)!!! As I said before, the Australian Dollar/Japanese Yen started to fall from the top of the ascending channel with Shooting 💫Star💫 Candlestick Pattern and finally managed to break the bottom line of the ascending channel. As a result, the Australian Dollar/Japanese Yen's expectation of my green color decreases. 🔅Australian Dollar/Japanese Yen Analyze ( AUDJPY ) Timeframe 1H⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Short
by pejman_zwin
GBPJPY Neutral within the 1D MA50 & MA200 until a break-out.The GBPJPY pair has turned its trading pattern into a Triangle since the June 09 High, with the Lower Highs trend-line as the Resistance and the Symmetrical 160.00 - 159.400 Zone as the Support. Practically it has been neutral within the 1D MA50 (blue trend-line) and the 1D MA200 (orange trend-line) since July 29, offering an excellent medium-term scalping range. Until that breaks either way, the trend is neutral and we can keep selling the high and buying the low. A break below the 1D MA200, is a bearish break-out signal towards the 155.650 Low, while a break above the Lower Highs of the Triangle, is a bullish break-out signal targeting the 168.740 Resistance. On the long-term, with the CCI still on Higher Lows isnce March 01, the bullish trend should be favored. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
by TradingShot
1
USD JPY - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI at 8.5%, the Fed is under pressure to continue hiking rates and ramping up QT in September to try and tame price pressures. They hiked rates by 75bsp in July, and odds between a 50bsp and 75bsp in September are too close to call. At the Jackson Hole Symposium they took a further hawkish shift by pushing back against the idea of rate cuts in 2023 by stressing that they not only envision hiking rates to close to 4% by early 2023 but also expect to keep rates high throughout 2023. However, the Fed did announce a data-dependent (meeting-by-meeting) stance at the July meeting, explaining that the pace of hikes is likely to slow as rates get more restrictive and as more data becomes available. This means the incoming growth, inflation and jobs data will be a key driver for short-term USD price action where we expect a cyclical reaction to incoming data (good data being good for the USD and US10Y and bad data being bad for the USD and US10Y ). The USD’s safe haven status is important to keep in mind. Uncomfortably high inflation and a Fed that is resolute and pushing rate higher and keeping them high does put possible further downside pressure on long bonds and equities, and if we see further cyclical-inspired downside in bonds and equities the USD is expected to gain in that environment on safe haven demand. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. As the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming data that exacerbates fears of recession and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. Any further outflows in US bonds means more USD safe haven appeal. So, watching key triggers for further upside in bond yields (commodity prices, inflation and inflation expectations, more aggressive hike rhetoric from Fed, very good growth data) could also trigger further USD bullish reactions. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. The USD is trading close to cycle highs while aggregate CFTC positioning is close to levels that previously acted as local tops. Positioning does make the USD vulnerable to short-term corrections, especially with bad US data points. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any FOMC comments that suggests more concern about growth than inflation could trigger bearish reactions in the USD, but with inflation so high any major dovish pivots seem still far away. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk assets. The data dependence stance from the Fed means we do want to be mindful that lots has been priced for the USD, and as growth deteriorates (as is currently our expectation), it’s expected to impact the USD negatively in the short-term, even though current inflation suggests any dovish pivot is still far away. As the safe haven of choice, any further recession focused downside in risk assets and bonds (due to sticky inflation and an aggressive Fed) could continue to prove supportive for the USD. In the short-term, with positioning in mind, and a dual-growth narrative (one being good for the USD and the other being bad for the USD) we prefer short-term catalysts that offer short-term sentiment-based trades as opposed to med-term positions. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE In recent weeks, yield differentials have been the biggest negative driver for the JPY with the BoJ keeping 10-year JGB yields capped at 0.25% with yield curve control while other central banks are hiking rates aggressively. Thus, the BoJ’s reluctance to shift on policy even with inflation starting to push higher remains a negative driver for the JPY. Even though the JPY is considered a safe haven, inflows has been limited in the current bear market compared to other cycles. The reason is Japan’s current account surplus (a main reason for safe haven appeal) has deteriorated due to the rise in commodity prices. Japan imports the bulk of their commodities , so very high energy prices has added to downside. The BoJ and MoF’s reluctance to intervene to stop the rapid depreciation in the JPY in recent weeks has been noticeable. As long as they just voice their dislike but fail to act, the market will keep testing them. Having said that, US10Y and commodities have been reacting more and more negative to the current negative cyclical growth outlook, and as a result has seen big players trim their massive JPY shorts. But this past week’s push higher in yields was a friendly reminder that inflation and yield differentials remain a major downside risk for the JPY, despite the negative cyclical outlook. POSSIBLE BULLISH SURPRISES Catalyst that triggers speculation that the BoJ could drop YCC or hike rates or both (big upside surprises in inflation ) could trigger upside in JPY, which means inflation data will be important to keep on the radar. Catalysts that trigger meaningful corrections in US10Y (less hawkish Fed, faster deceleration in US inflation , faster deceleration in US growth) or meaningful bouts of risk off sentiment could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any intervention from the BoJ or MoF to stop JPY depreciation (buying the JPY or giving firm and clear lines in the sand for USDJPY ) could offer decent reprieve for the JPY. POSSIBLE BEARISH SURPRISES With yield differentials playing such a huge role for the JPY, any catalysts that push US10Y higher (more aggressive Fed, further acceleration in US inflation , better-than-expected US growth data) could trigger further bearish price action for the JPY. Any catalyst that creates further upside in oil prices (further supply concerns, geopolitical tensions) poses downside risks for Japan’s current account surplus and could trigger further bearish reactions in the JPY. Further reluctance from the BoJ and MoF to address the concerning depreciation in the JPY, and further reluctance from the BoJ to pivot away from very dovish policy is a continued negative driver for the JPY to keep on the radar. If the BoJ pushes back against calls for a policy shift despite upside surprise in CPI could trigger further JPY downside. BIGGER PICTURE The fundamental outlook remains bearish for the JPY, especially after the BoJ once again stuck to the same overly dovish script at their July meeting. As long as US10Y remain elevated and the BoJ stays stubbornly dovish and no push back is made against the JPY weakness from the BoJ or MoF, the bias remainslower. But take note of positioning which means we don’t want to chase the JPY lower and bullish reactions can see outsized upside on big drops in US10Y & commodities (which means keeping cyclical developments in the US in mind as a key influence on US10Y and thus the JPY as well). It also means watching incoming CPI data closely as any huge upside surprises could trigger speculation of a possible policy shift.
by thunderpips
1