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Daily GBP/JPY analysis

  • #6,241
  • Jun 15, 2007 6:21pm Jun 15, 2007 6:21pm
for the guys that keep longing g-j, here's a daily chart with a bearish divergence which tells me g-j should be ready for a nice fall.
now what i'm waiting for is a reversal sign on daily (maybe h4?). a pin bar, or a double bar high with a lower close... whatever.
see you at the lower level.
Attached Image (click to enlarge)
Click to Enlarge Name: gj.jpg Size: 61 KB
Nihil Sine Deo.
  • #6,242
  • Jun 15, 2007 8:15pm Jun 15, 2007 8:15pm
Quoting Scrat
for the guys that keep longing g-j, here's a daily chart with a bearish divergence which tells me g-j should be ready for a nice fall.
now what i'm waiting for is a reversal sign on daily (maybe h4?). a pin bar, or a double bar high with a lower close... whatever.
see you at the lower level.
Whats that info bar you got along the bottom? Got a link for it?
  • #6,243
  • Jun 15, 2007 9:38pm Jun 15, 2007 9:38pm
Here you go sniper
Attached File(s)
File Type: mq4 (T_S_R)-Daily Range Calculator V2.mq4   12 KB | 380 downloads
  • #6,244
  • Jun 15, 2007 9:50pm Jun 15, 2007 9:50pm
Quoting Linuxist
You're soo Right! "Charade" is an appropriate conclusion....

I'm a victim of the NYC public school system, so I'm oblivious to how one foriegn country's currency affects another. I'd like to know...

...Is there a more powerful country (than Japan) who maybe strong-arming them to artificially supress the value of their currency?

...Is this why the Fukui suggested a "gradual" rate adjustment?

...What will be the sequence of events (in terms of other countrys response) be when the BOJ finally raise its rates...(even a smijjen)

Thank you all for your informative Posts.

L.
Can't refuse a reuest from a Linuxist
Re. currency relationships; lots of books are available, depending on your pain threshold. Cornelius Luca "Trading the Global Currency Markets" is a great backgrounder, though a little dated and aimed more at big & institutional trader types. But good stuff on the basic market, and written by an experienced trader. If you like relatively long winded techno-economist stuff (say, written at the intro grad student level with some math), Hallwood & MacDonald "International Money and Finance" is quite up to date. Of course being written by economists, it's a fairy-tale, but it seems pretty much to reflect what other economists believe. When in Rome....

Re Japan - no need to think of anyone pushing them into this position. Japan makes serious mistakes (think Pearl Harbor) but - being a very long-lived country - learns from the past (think modern Japanese pacifism). Up till the mid 70's or so, the yen was trading in the 3-400 zone; then it soared relative to the US, to around 100. Party time and a real threat to Japanese culture (they take it seriously) until the Nikkei blew up and real estate crashed (at one time downtown Tokyo was reputedly valued at more than the state of California), leaving a very shaky economic system. Japan has put a very tight lid on it's ccy since then, in slowly decaying oscillations (check the monthy chart from the 70's onward) , and the economy is pretty disciplined. Over here we find 1% interest rates ludicrous - over there they make sense because prices are deflating.

If there is pressure it's from the spectacular growth in China, which seems intent on recreating the Japanese miracle of the 50's & 60's, using many of the same techniques (and despite the bellyaching over here, it really does come down to simple things like hard work and a willingness to forgo much though not all excess consumerism. And, FWIW, I think they learned from the Japenese experiment in rapid reval, which is one reason they are doing their best to avoid it). Japan was ok with China as long as the Chinese produced low quality goods didn't cut into Japan's higher quality exports.

But China's catching up much faster than expected, so Japan has to keep it's ccy as low as reasonably possible. Also there it looks like Asia in general is slowly getting it's act together to cooperate on such matters - though that will take awhile, considering it's far more diverse than (say) Europe. A Japan/India/China/ Korea+ a host of smaller friendlies & maybe Indonesia (+ NZ and Australia as token minorities with lots of raw material) would be a formidable trading block....To do that requires a commitment to harmonization, which again, just takes lots of time, good will, and behid-closed doors negotiations.

Re rates, I think most countries would be glad if Japan started raising rates, it might alleviate the troubles caused by the carry trade. Of course they could just lower their own rates, which would have the same effect, but it's always easier to point the finger at someone else. A big risk though, especially in high interest rate countries and heavy debtors (like the US) is that Japanese liquidity is propping up the loan market. That subprime mortgage castle - as well as the hedge fund universe - is built partly on a very tall, narrow, pile of low-interest rate sand.....
  • #6,245
  • Jun 15, 2007 10:07pm Jun 15, 2007 10:07pm
I had to reply! Ijust noticed your date on first post was sept 2006 to buy gbp/jpy. i went long on june 11 2007 and made 59pips who says your advice is old news.
  • #6,246
  • Jun 15, 2007 10:45pm Jun 15, 2007 10:45pm
Quoting imbiber
Here you go sniper
To quote a famous movie:

"How, how does it work?"

LAUNCELOT
I know not.

ARTHUR
Consult the Book of Armaments.

BROTHER MAYNARD
Armaments Chapter Two Verses Nine to Twenty One.

ANOTHER MONK
(reading from bible)
And St. Attila raised his hand grenade up on high saying "O Lord bless
this thy hand grenade that with it thou mayest blow thine enemies to
tiny bits, in thy mercy. "and the Lord did grin and people did feast
upon the lambs and sloths and carp and anchovies and orang-utans and
breakfast cereals and fruit bats and...

BROTHER MAYNARD
Skip a bit brother ...

ANOTHER MONK
... Er ... oh, yes ... and the Lord spake, saying, "First shalt thou
take out the Holy Pin, then shalt thou count to three, no more, no
less. Three shalt be the number thou shalt count, and the number of
the counting shalt be three. Four shalt thou not count, neither count
thou two, excepting that thou then proceed to three. Five is right
out. Once the number three, being the third number, be reached, then
lobbest thou thy Holy Hand Grenade of Antioch towards thou foe, who
being naughty in my sight, shall snuff it.[FONT=verdana,geneva,lucida,'lucida grande',arial,helvetica,sans-serif]

Overkill I know but it's the week end the fish didnt bite the BBQ got rained out and now I been watching Monty Python.

So yeah whats it good for?


[/font]
  • #6,247
  • Jun 15, 2007 11:34pm Jun 15, 2007 11:34pm
It gives you the daily range information. I don't personally use it. I just had it in my mt4 indicator directory.
  • #6,248
  • Jun 15, 2007 11:42pm Jun 15, 2007 11:42pm
Hmm yes I think I have my head around it now.
  • #6,249
  • Jun 16, 2007 5:47am Jun 16, 2007 5:47am
Quoting Scrat
for the guys that keep longing g-j, here's a daily chart with a bearish divergence which tells me g-j should be ready for a nice fall.
now what i'm waiting for is a reversal sign on daily (maybe h4?). a pin bar, or a double bar high with a lower close... whatever.
see you at the lower level.
MACD Daily has been showing divergence since mid-april yet we keep making new highs. I personally dont trust divergences because by the time they *may* work, you're already hundreds of pips in the red.

Just have a look at the Daily chart, the 4H chart and the 1H chart. They all point up. Instead of trying to find a top (scoring a number of stoploss hits in the process), why not wait for a retrace to buyable levels and then seek for a long? Doesnt that sound more sensible than trying to short the mother of all uptrends?
  • #6,250
  • Jun 16, 2007 6:17am Jun 16, 2007 6:17am
Quoting WTB
MACD Daily has been showing divergence since mid-april yet we keep making new highs. I personally dont trust divergences because by the time they *may* work, you're already hundreds of pips in the red.

Just have a look at the Daily chart, the 4H chart and the 1H chart. They all point up. Instead of trying to find a top (scoring a number of stoploss hits in the process), why not wait for a retrace to buyable levels and then seek for a long? Doesnt that sound more sensible than trying to short the mother of all uptrends?
thanx god one is with me here. Good input, WTB. Im not negating Scrat's warning, it will surely happen someday, maybe next week, maybe next month. This is the problem - divergence signal is not very accurate, and many times it is negated by a new high in MACD. It all depends on the market sentiment. MACD works with historical prices, but we need some fundamental reasons for the market to start buying yen heavily in order for the prophecy to come true. I dont think the big guys who make millions from the carry trade are watching MACD nowadays and say, damn, its forming a divergence, we should sell the pound and buy the yen. There is no fundamental reason for this scenario now, BOJ wont increase rates in the near term, UY just made new highs, GY the same, EY is back to the all timke new highs after that sharp fall in a matter of days. This speed with which all the yen pairs recovered the lost territory last week scared me. And it shows me that the market sentiment is very strong regarding the carry trades - i.e. nobody wants to give up the huge profits from swaps right now, just for the sake of some technical indicators showing divergence.

Take a look on the below chart, MACD kept on showing divergence on the weekly repeatedly in 2004 and 2005, and what happened? Did it fall? No... It went up. Look on the daily chart on how vertical and angry the price rose on both EUR JPY and GBP JPY since June 13...would you short this kind of market? You would be crazy. The only serious falls in the yen crosses happened due to economical reasons, not divergences and OB levels. Another example - Stochs have stayed at OB levels for almost the whole 2006, and yet GY went up like crazy - from 204 to 240.

The most likely scenario will be a retracement to the middle of the move, maybe 242, in the worst case - this is my opinion. And this will probably happen next week, so it will give us a wonderful price to buy. The best approach in my opinion is to trade what you see, dont try to forecast especially this monster, because it doesnt work. I keep on buying dips, and if I will see the price falling like a brick, I will start shorting. I think its much easier than guessing the top due to a pin bar combined with some macd divergence.
Just my 2 cents.
Attached Image (click to enlarge)
Click to Enlarge Name: gy.jpg Size: 99 KB
We leave no soldier behind.
  • #6,251
  • Jun 16, 2007 7:13am Jun 16, 2007 7:13am
you are right about divergences, they don't mean anything without a confirmation. and particularly in this case, i think it's useless without a fundamental confirmation.
so i'll watch what happens with cad and nzd.

Quoting WTB
MACD Daily has been showing divergence since mid-april yet we keep making new highs. I personally dont trust divergences because by the time they *may* work, you're already hundreds of pips in the red.

Just have a look at the Daily chart, the 4H chart and the 1H chart. They all point up. Instead of trying to find a top (scoring a number of stoploss hits in the process), why not wait for a retrace to buyable levels and then seek for a long? Doesnt that sound more sensible than trying to short the mother of all uptrends?
Nihil Sine Deo.
  • #6,252
  • Jun 16, 2007 9:34am Jun 16, 2007 9:34am
Hehe I'm still likely to short this pair come monday, that is if sunday doesn't ruin the move.

Here's what I have for the pair on the 4h chart.
Attached Image (click to enlarge)
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  • #6,253
  • Jun 16, 2007 11:04am Jun 16, 2007 11:04am
Quoting NewstraderFX
June 1 buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy

g/j to 245 and then 250

buy buy buy buy buy buy buy buy buy buy
Just wanted to update you on this
  • #6,254
  • Jun 16, 2007 6:34pm Jun 16, 2007 6:34pm
begain of the week i think it should come down down a bit as it in the OB so it can move back up. maybe see 245 and above middle of next week what does everyone else think?
  • #6,255
  • Edited 9:21pm Jun 16, 2007 9:17pm | Edited 9:21pm
For the swing traders,

I see the weekly chart trending upward...There is no reason to short this pair unless you are a short term trader..The pair is still in the tunnel and heading probably near the 250 range before reversing back toward the bottom trend line..

The trend is your friend...Simple to follow

Follow the overall trend!!!
Attached Image (click to enlarge)
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[
  • #6,256
  • Jun 17, 2007 10:07am Jun 17, 2007 10:07am
what about break out methods??
Quoting cesarnc
I know the feeling...

I started with "buy low, sell high"....

Then came this guy "fibonacci" (whatta hell?)
Oh! I got it now...

Then came "BOE's surprise hike" (whatta hell?)
Oh! I got it now...

Then came this "carry trade" (whatta hell?)
Oh! I got it now...

Then came "Chinese stock market selloff" (whatta hell?)
Oh! I got it now...

Then came "CB officers against Yen weakness" (whatta hell?)
Oh! I got it now...

Then came "dollar-index" (whatta hell?)
Oh! I got it now...

Then came "Rumours from Iran" (whatta hell?)
Oh! I got it now...

Then came "Dow Jones" (whatta hell?)
Oh! I got it now...

Then came "10yr Treasury" (whatta hell?)
Oh! I got it now...

There you have it, now try "buy low sell high" with these!
....
  • #6,257
  • Jun 17, 2007 10:16am Jun 17, 2007 10:16am
I Sell Gj 243.69
  • #6,258
  • Jun 17, 2007 2:56pm Jun 17, 2007 2:56pm
Quoting HalifaxCB
Can't refuse a reuest from a Linuxist
Re. currency relationships; lots of books are available, depending on your pain

Re Japan - no need to think of anyone pushing them into this position. Japan makes serious mistakes (think Pearl Harbor) but - being a very long-lived ...


Re rates, I think most countries .....sand.....

Thank You HalifaxCB,

I'm not a true Linux user yet. But hope to in the near future...When I'm making lots of pips. Enough to quit my soul sucking job and have lots of free time.

Your answers gave my Trade dicionary a real Work out.

And have confirmed my FX philosphy.....

The only thing that really matters is PRICE MOVEMENT:

Trade in the Trend (when you can)
Buy/Sell The DIPS!!!

Today I see a great dip forming in the 1Hr. May even dip as far as the 200sma. (I imagine the macd is a rubber band: The further it 'stretches' away from the zero line, the stronger it snaps back!). I'll go short if price starts closing below my 21ema (4hr). And close out when macd tells me.

Don't see it going beyond Last week's weekly pivot (239.94) though...But if it does....Hang on to your hats!! That divergence may become self-fufilling.

After a good price dip, on the way back up, Watch for bounce downward on the last ma surpassed (4Hr.). This may signal that the reversal everyone's warning us about, is in play.

Thanks Again,

L.
  • #6,259
  • Jun 17, 2007 11:06pm Jun 17, 2007 11:06pm
what are your short term thoughts on this pair?
  • #6,260
  • Edited 11:18pm Jun 17, 2007 11:15pm | Edited 11:18pm
Quoting gr8collector
what are your short term thoughts on this pair?

250 in the near future

I don't intend a short on this market will be buying on dips.

And if anyone wants to see what it looks like in a fight between a Central bank vs "World"

Watch the NZ crosses as per post here

Wouldn't go near those for awhile
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