GBP/JPY for QQE Traders!

Quoting Pips_Cruiser

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Looks like price is hanging around in the 50% retrace area from yesterday's fall. The Asian pivot is in the same general area. I have a couple longs from early this morning that are waiting to take profit at R1. So I'd like to see that happen today. But if need be, I can wait until tomorrow.

Let's see how things develop . . .

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Quoting ultimate

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Wed Feb 20 4:30am GBP http://www.forexfactory.com/images/m...mpact_high.gif MPC Meeting Minutes

I beleive the minutes will show a split vote 8-2? with an inflation comment and should make this pair go up.

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Quoting Pips_Cruiser

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I spent a few weeks trying to get a better understanding of the Dow / G/J correlation. At first I was doing the same thing you’re doing here. But it doesn’t take long to realize that any exact “mirroring” between the Dow and G/J is only temporary, and not all that predictable. It also doesn’t take long to realize that you can’t come up with an effective scalping strategy for it, based on minor Dow fluctuations. Both of these findings can be a step in the right direction, as long as you don’t spend much time on it. That’s because they help clarify things, and remove some misconceptions.

To understand things even better, you need to start with this simple fact: G/J price is derived from two different currency pairs, G/U and U/J. If you multiply the price of G/U by the price of U/J, you will arrive at the price of G/J. Looked at another way, GJ = GU * UJ.

From my observations, it’s U/J’s price that is highly influenced by the Dow, especially during NY session. When G/U is in a tight range, or slowly trending, it’s mostly U/J that causes G/J to move. This is when you see a strong correlation between G/J and the Dow. U/J follows the Dow, and G/J follows U/J. It’s an indirect relationship. On some days you can compare 15 minute charts of G/J and U/J, and they look almost identical. If you then compare them with the Dow, you notice G/J and U/J peaks and valleys are in sync with the Dow for that day. But this nice little correlation starts to crumble on days when G/U price moves around a lot. Remember it’s the other half of G/J.

If you look at larger time frames, the correlation between G/J and the Dow is also the strongest when G/U is stable. People started noticing the correlation while the Pound was strong, stable, and slowing trending upward. But as soon the Pound started becoming unstable (see last December), the correlation ceased to exist. The exact same reasons apply here, as they do on the smaller time frames. U/J was still following the Dow upwards, but G/J wasn’t following it anymore because it was being pulled in the opposite direction by G/U. The Dow would rally strong, but G/J price would remain the same or even go down, because G/U was tanking badly. This was when talk about a “disconnect” began.

But it’s also an oversimplification to think that U/J just follows the Dow around. Lots of times that’s true during NY session. But its also influenced by carry trades, fundamental news, and the Nikkei stock index during Asian session. It also reacts like any other currency pair to support and resistance levels (fibs and moving averages). So it’s not a perfect mirror either, and nobody claims that it is.

All in all, the Dow (and the Nikkei to a lesser extent) are still considered good indicators for G/J, especially during NY and Asian sessions. But they shouldn’t be considered fool proof, or given more importance than they deserve. It's just another tool set for you to use or not, as you see fit. The time when it's most noticeable is when there's a big stock market rally or fall.

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Quoting fx_lane

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kujo I need help.How do you use the fibs? Ok I want to project them from the daily chart, when do I say it's now retracing? swing low and swing high?just use the normal GBPJPY chart on a daily and 4H chart. U don't have to post the chart just give the swing hhighs and lows I looked at a few materials but I still think you are the best with fib analysis that I have to give to you. why don't you write something on fib analysis so we can just refer to it as opposed to bugging you?

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Quoting Nobitacu

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Thanks Pips_Cruiser, that's a lot of good info! ^^

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Quoting kujo17

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but since learning Fibs, my profitability has gone through the roof.

Good luck and Trade what you see.

kj

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Quoting Pips_Cruiser

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Looks like price is hanging around in the 50% retrace area from yesterday's fall. The Asian pivot is in the same general area. I have a couple longs from early this morning that are waiting to take profit at R1. So I'd like to see that happen today. But if need be, I can wait until tomorrow.

Let's see how things develop . . .

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Quoting Nobitacu

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My R1 for Tokyo is @211.25. Man... wish I was awake at the time when you guys Longed in the 208.5 area... =( Oh well... there is always next chance in this market, always wait for the trade to come to you, never chase it, you'll never catch it doing it that way. ^^"

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Quoting ultimate

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Always plenty of chances to make your sure 100 pips with this pair. Great discipline Nobitacu!

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Quoting esskiara

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hi all

I'new to forex
thanks kojo for the Fibs tutorial
hope to learn more from the expert here

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Quoting kujo17

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210.80 and 211.05 are strong S/R levels.

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Quoting ultimate

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Taking profit at 211.3 if she gets there before London and rebuying lower of given the chance.
UJ is on a tear also ... whats goin on? Short squeeze?

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Quoting ultimate

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Taking profit at 211.3 if she gets there before London and rebuying lower of given the chance.
UJ is on a tear also ... whats goin on? Short squeeze?

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Quoting kujo17

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boredom push up ?

Frankfurt and London will push her down.

To pick up Buyers for Triple Int. Weds.......

we'll move up to 212-213 area tomorrow probably and once we get a close above the 4H 200ema, we'll see 217 !!!

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Quoting kujo17

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Look back a ways on the 15M charts
210.8 was STRONG Support, now Resistance.

Patience...... let her come down and go long at the bottom.

We'll be begining our longer term UP trend around the bottom here.

208-209ish.

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