USD/JPY Discussion

UJ presently is trading closer to 111 than 112. And interest rates are going higher because federal spending is going higher and the Treasury Dept is issuing more notes and bonds then originally anticipated by the markets. Who'd thunk that with an unfunded unnecessary yuuuuge tax cut for the wealthiest.

I closed my long position with small profit.

I'm seeing the pair like @SunTrader , it's closer to 111 and it keeps making new lower highs.

I think I'm gonna short soon UJ

I have no bias either way right now. And just pointing out the obvious.

I currently have price coiling up in a symmetrical triangle, so I'm waiting for it to break.

My inkling is to the upside, but I'll let price action show me the way.

Was forming on friday a H+S was, before NFP, but got broke. Only to have a larger H+S pattern appear plus the bullish flag. We also see the flag forming on the 1 hour. With volume also about to break its down trend.

USDJPY is trading below the resistance level 111.424 and just break down in a symmetrical triangle pattern in a technical 4-hour chart. I expect the bearish momentum to continue for next trading hours, pair just crosses first support at 111.220 and if it sustains below this level, then it will take second support at 111.157. Further mounting pressure will force the pair to fall till level of 110.844 after sustenance below third and fourth support level 111.093 & 111.042. A solid selling after breakdown of pattern will make the pair to attain level of 110.610 after sustaining below fifth support at 110.708

If it breaches the resistance level, then it could face second resistance at 111.507 and may witness a climb till level of 111.718 after breaching third resistance at 111.596

So far so good. Going to wait for a deeper fall before i exit, perhaps 110.2 or so. A break below 110 level would be just pretty

Cause and effect, action, reaction, hmmm

Slowly USDJPY is coming back down again. In view of the otherwise appreciating US currency it does not require extensive mathematical skills to realise: we are dealing with quite impressive yen strength. With some delay the market has realised that its initial reaction to the BoJ decision was pointless. The BoJ’s forward guidance was not a JPY negative surprise but put the generally acknowledged triviality into words - and therefore did not constitute a sound reason for the FX market to react. No, its decision to change its monetary policy in order to take the profitability of domestic banks into consideration means that the BoJ has once again raised the white flag in its fight against low inflation. In my view one too many times. Over the past decades it has capitulated so many times that I have decided not to fall for it ever, ever, ever again if a smart new Prime Minister announces together with a new, dynamic BoJ governor that the problem of low inflation would now be tackled in seriousness. I think the Japanese society and politicians have got used to this state of zero inflation. It is better to carry on with all these inefficiencies and absurdities than to dare implement the major disruptive leap – in my view that is the message the BoJ capitulation clearly delivers (and that the public obviously is prepared to totally accept). Of course that also means: there are no artificial limits for the yen any more when it comes to appreciation. The area of 111.20/40 is only the very beginning. If USD weakness is then added to this at a later state USDJPY can reach great new lows.

Performing bull flag...Im still on buying mode.

I immediately took the view that the adjustments of the Japanese monetary policy implemented by the Bank of Japan last week amounted to a capitulation on the part of the BoJ. In the meantime reports have emerged that the BoJ considered rate hikes twice this year. That confirms my fears that the more flexible interpretation of the yield curve target was nothing else but the beginning of the end of ultra-expansionary monetary policy in Japan. This interpretation receives additional support when studying the “Summary of Opinions“ published today – an overview of the BoJ board members’ views voiced at the most recent monetary policy meeting. They mentioned repeatedly that the monetary policy framework has to be strengthened so that the BoJ can maintain its expansionary monetary policy for longer. It feels forced to do that because despite all the best efforts inflation is far from having been anchored near the inflation target of 2%.

So far, so good. The problem is though: the BoJ members consider this more flexible approach of their monetary policy (both for the yield target and for the asset purchase volume) as the great redeemer that will facilitate sticking to an expansionary monetary policy for a long time. However, implicitly this flexibility means: higher interest rates and lower asset purchases, i.e. a tightening of monetary policy. One board member for example has already demanded a larger fluctuation range for the yield target between +/ 0.25%. It is clearly stated that this should above all lead to an increase in returns, which means that flexibility on both sides is an illusion. Even though another member clearly warns that an adjustment of monetary policy that allows long term yields to rise is more likely to contribute to sluggish price momentum, the BoJ decided in favour of exactly that approach. As a result there are increasing signs that the BoJ itself has lost the belief in reflationing - i.e. the rise of the inflation rate to 2%. Instead it focusses on reducing the side effects of the expansionary monetary policy, in particular for the financial sector. The likelihood that inflation in Japan can be anchored at 2% on a sustainable basis is therefore likely to fall again notably. That in itself points towards a strong yen as other major economies can increasingly record successes in the return to healthier inflation momentum. Combined with the prospect that the BoJ will probably continue to tighten its monetary policy in the future (or will make it more sustainable) rather than ease it there is nothing to stop the yen from appreciating. To be honest I am surprised that we have not seen that move yet.

https://www.forexfactory.com/showthread.php?t=768090

looks like a flag...

H4

See the same thing, I do. Daily is starting to showing some strength as well.

But the one thing I will say is if price isnt able to rally (which Plenov thinks won't happen) their is along way to go underneath.



Ready for it, we must be,

i see a yen rally and a dollar rally

bullish for UJ, nope

but the step cousin (gold) may prosper

2 cents

play safe

p.s. full disclosure: im not trading this pair atm

There's a third possibility which I subscribe.

UJ will range between 110 and 113 until next BOJ rate decission next month.

Bulls can't break 113 and bears can't break 110 so far...

Right now I'm bearish mid term in UJ.

300 pip range, ill take that

Yen Futures

H1

- Hedge for now.