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SPX Showing Signs of Weakness at PCZ of a Bearish Alternate BatThe RSI on the daily has begun to rollover as the SPX appears to have rejected off of the Bearish Alternate Bat HOP level. There does not appear to be much nearby support within the range the SPX is currently trading in so if it gets back below the previous All-Time High I could see it coming back down to around $5100 maybe even $5000 - $4800. This all seems to be brought on by the increase in JGB Yields disrupting the Carry Trade. We may see them try to stabilize the carry trade around $5100 but there is a heightened chance of failure. More on the carry trade can be seen in the related idea below.
OANDA:SPX500USDShort
by RizeSenpai
Yen in calm waters ahead of inflationJapan has seen inflation move higher, although nowhere near the levels in the US or the UK, which are not far from double-digits. Last week, core CPI for May came in at 2.1% YoY, unchanged from April. This was the second straight month that core CPI remained above the BoJ's target of 2%. This is a dramatic shift, given that Japan struggled with deflation for decades. The driver behind rising inflation is higher food and energy prices, as well as the plummeting yen. Notably, wages have not risen. The Bank of Japan has insisted that this cost-push inflation is temporary. The BoJ wants to see stronger domestic demand and an acceleration in wage growth before it will consider altering its ultra-loose monetary policy. This has taken a massive toll on the yen, which has plunged about 17% this year. The BoJ released its Summary of Opinions from the June meeting, with members showing support for the Bank's monetary policy. One member said that upward pressure on JGB yields could be expected. The Bank has tenaciously defended its yield curve control and intervened in order to cap 10-year yields at 0.25%. With the Federal Reserve in the midst of an aggressive rate-tightening cycle, the US-Japan rate differential will widen, putting more pressure on the yen. It's a busy week ahead for Japanese releases on the calendar, highlighted by further inflation releases. On Tuesday, we'll get a look at BOJ Core CPI, the central bank's preferred inflation gauge. This will be followed on Friday by Tokyo Core CPI for June, which could breach above 2.0%, after a 1.9% gain in May. USD/JPY tested resistance at 1.3540 earlier in the day. Above, there is resistance at 1.3654 USD/JPY has support at 1.3409 and 1.3295
by OANDA
ridethepig | JPY Capital FlowsAfter getting the breakout we were tracking for in USDJPY we are now back and revisiting our infamous "Loading Zone" area at 109.3x right in time for BOJ to maintain the status quo. Outside of a knee jerk via risk I expect USDJPY to hold 108 - 109 range until we clear BOJ next week. Odds of Japanese rates being taken further into the red is declining, meaning the BOJ is likely to sound hawkish via maintaining the status quo flows towards 100. Japanese consumption is falling alongside production after the tax hike and we are already starting to see this show up in store closures throughout the country, however, you can see some are already starting to argue a case for Global manufacturing recovery (unlikely with protectionism via Trump). JPY inflows will continue to come via risk as long as BOJ remains on hold and warrants increasing bearish exposure. Looking to add more $JPY shorts into the 109.3x resistance with clear jurisdictions mapped on both sides, resistance is initially found at 109.3x. While to the downside support is located at 108.2x which holds the key to unlocking the 2020 macro leg towards 100. Thanks for keeping the likes and comments coming, as usual jump into the conversation with your charts and questions!
Short
by ridethepig
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