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USD/JPY Discussion

  • #6,141
  • Apr 19, 2008 8:13am Apr 19, 2008 8:13am
Quoting SBrickman
http://i30.tinypic.com/30hy9o1.gif



Fib retrace ... 23, 38, next stop 50.
I started trading or rather continued trading this pair starting about 3:00 AM on Friday. The pair was holding steady until about 5:00 AM. At that point there was a powerful move up. If you look at the US Dollar Index you can see the move. Then again at 6:00 AM the same thing happened. It was caused by extremely large purchases of EUR/JPY

The Yen was sold BIG TIME and the EURO was purchased.

This was NOT about fundamentals, this was about INTERVENTION. This was planned. The Technicals helped a little but only to make you aware as these great charts by our friend show the various support and resistance points along the way up or back down.

In normal times it does not go through support and resistance in WARP time.

Then the EVENT that nobody could predict or understand until it was clear what was happening. Then at 6:30 AM, Citibank announces an incredible writeoff much better than the rumor that had been circulating for days that it might be twice what it was. The relief that it was not worse caused the normal insanity in human thinking terms and the Dow Futures took off.

In the case of all those that do technicals including our friend the fundamental fact that is never in their charts is what the Dow will do that day since the USD/JPY is almost 100% correlated to the Dow's ups and downs.

When the market opened the rest of the ride started and all that was occuring was tremendous amounts of buying of Euro's and selling of the Yen. At the same time there was a massive selling of Gold as the US Dollar want up almost 100 PIPS from 5:00 AM until nearly 3:00 PM when it started to back off.

The lessons for ALL, Whether Technical traders or Fundamental traders or bhoth is that at times like this there needs to be the proper risk management tools in place. I will talk about that at another time. I took some serious losses and I need now to review what might happen next to this pair. I have a technical chart that I will try to locate that shows the pattern of the USD/JPY and EUR/JPY since March 27, 2008. It is fascinating to look at.

Later...Have a Great Weekend.

Bruce
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  • #6,142
  • Apr 19, 2008 9:06am Apr 19, 2008 9:06am
I don't think it was intervention. The earnings news was just bullish all around imvho. Vix index was low and specs just piled in imvho.
Patience + Humility + Study = Success
  • #6,143
  • Apr 19, 2008 9:25am Apr 19, 2008 9:25am
Let Me Start With A Snippet From: WWW.JSMINESET.COM

Posted On: Friday, April 18, 2008, 4:02:00 PM EST
http://www.jsmineset.com/spacer.gif
Market Commentary From Monty Guild
http://www.jsmineset.com/spacer.gif
Author: Monty Guild
http://www.jsmineset.com/spacer.gif



Dear CIGAs,
I couldn’t help but laugh at the obvious Friday morning manipulation of the gold and currency markets by the G-7 countries. Let’s face it, gold and currency valuations are report cards on:

  1. Inflation
  2. Bank safety
  3. Management of the US and other major economies.

No politician wants to run his economy in a way where he has to pay for all of his giveaways with taxes, so he runs budget deficits. He then finances the deficit by selling debt. This causes the currency of the bond selling country to fall and gold to rise. Often those who speculate against countries do so on high margin. So why not scare the speculators by selling gold and currencies while rallying the dollar on Fridays?
A speculator holding gold, currencies or any other commodity on 16 to 1 margin is often afraid to hold over the weekend because a news event could wipe him out. So the highly levered speculator often sells on Friday.
An old commodities trick is to buy a bull market on Friday when traders get out for the weekend. Clearly all of the major currencies are in bull markets versus the dollar. So highly leveraged traders sell on Friday and force the dollar up, then the experienced traders buy after the decline.



If Someone Would Be Kind Enough To Do A Parallel Chart from March 27, 2008 until present day of USD/JPY and EUR/JPY you will see how they went in lockstep from 97 to 105 and 156 To 164

This is very important to know. There is one more link that I want to post. It is WWW.DAILYFX.COM and it is concerning the article on "Yen Crosses: Big Move is a Bear Market Rally"

Here is part of it. Please go to the Website to read the article and view the great charts accompanging the article.

Snippet:

Written by Jamie Saettele, Technical Currency Strategist
<DIV id=article>The Yen has fallen hard and fast. USDJPY nearly reached 105 and EURJPY 165 today. Still, when viewed in the proper context, the argument is strong that the recent Yen decline (Yen crosses’ advance) is simply a big countertrend move.


Folks...All Input, Comments are welcome.



Bruce<SPAN style="FONT-SIZE: 11pt; FONT-FAMILY: Arial">

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  • #6,144
  • Apr 19, 2008 2:19pm Apr 19, 2008 2:19pm
http://i25.tinypic.com/2a9xgu9.gif

"If Someone Would Be Kind Enough To Do A Parallel Chart from March 27, 2008 until present day of USD/JPY and EUR/JPY you will see how they went in lockstep from 97 to 105 and 156 To 164"

Is this what you meant?

http://i28.tinypic.com/2liwi0g.gif

The lines are open/high/low/close for eair pair.
  • #6,145
  • Apr 20, 2008 6:13am Apr 20, 2008 6:13am
The Chart produced shows the correlation between the pairs. It is quite revealing at least to me. I am going to think of a way to take advantage of these facts. Thinking out loud as I generally do not use hedges in my trading as I usually get out of positions on the same day or within days. Looking back instead of having say 5 shorts on USD/JPY and then Hedging by placing 5 longs on the longs.

I think the other Hedge option would have been short the say in this example 5 USD/JPY and long 5 EUR/JPY.

Then on a retracement from say 104.00 USD/JPY and 164.00 EUR/JPY the profits would come back in the USD/JPY and the loss would accumulate against any profits in the EUR/JPY

Of course the Hedge needs to be put on at the correct time say when the USD/JPY was at 102.00 and EUR/JPY was at a correlated 162.00

Then you could have booked a profit of around say 175 Pips if you waited say about 25 PIPS for the confirmed retracement as the Dow backed off or took profits and then at a certain point sell your longs on EUR/JPY.

As the USD/JPY continues down you close your positions when you are in a profit mode.

I would appreciate feedback on this post. I am wondering if this really is a better hedge than just Hedging again in this particular example being short 5 USD/JPY and long 5 USD/JPY instead of short 5 USD/JPY and long 5 EUR/JPY.

Have a Great Sunday and for those that celebrate Passover Don't eat any bread. Enjoy the Matzah
{Promotion Removed}
  • #6,146
  • Apr 20, 2008 10:51am Apr 20, 2008 10:51am
Quoting Warren Forex
I started trading or rather continued trading this pair starting about 3:00 AM on Friday. The pair was holding steady until about 5:00 AM. At that point there was a powerful move up. If you look at the US Dollar Index you can see the move. Then again at 6:00 AM the same thing happened. It was caused by extremely large purchases of EUR/JPY

The Yen was sold BIG TIME and the EURO was purchased.

This was NOT about fundamentals, this was about INTERVENTION. This was planned. The Technicals helped a little but only to make you aware as these great charts by our friend show the various support and resistance points along the way up or back down.

In normal times it does not go through support and resistance in WARP time.

Then the EVENT that nobody could predict or understand until it was clear what was happening. Then at 6:30 AM, Citibank announces an incredible writeoff much better than the rumor that had been circulating for days that it might be twice what it was. The relief that it was not worse caused the normal insanity in human thinking terms and the Dow Futures took off.

In the case of all those that do technicals including our friend the fundamental fact that is never in their charts is what the Dow will do that day since the USD/JPY is almost 100% correlated to the Dow's ups and downs.

When the market opened the rest of the ride started and all that was occuring was tremendous amounts of buying of Euro's and selling of the Yen. At the same time there was a massive selling of Gold as the US Dollar want up almost 100 PIPS from 5:00 AM until nearly 3:00 PM when it started to back off.

The lessons for ALL, Whether Technical traders or Fundamental traders or bhoth is that at times like this there needs to be the proper risk management tools in place. I will talk about that at another time. I took some serious losses and I need now to review what might happen next to this pair. I have a technical chart that I will try to locate that shows the pattern of the USD/JPY and EUR/JPY since March 27, 2008. It is fascinating to look at.

Later...Have a Great Weekend.

Bruce


Dear Bruce,
Thanks for sharing the info. I have been following Jim Sinclair's MineSet, and recommend others to have a look as well.
  • #6,147
  • Apr 20, 2008 11:48am Apr 20, 2008 11:48am
Quoting Warren Forex
The Chart produced shows the correlation between the pairs. It is quite revealing at least to me. I am going to think of a way to take advantage of these facts. Thinking out loud as I generally do not use hedges in my trading as I usually get out of positions on the same day or within days. Looking back instead of having say 5 shorts on USD/JPY and then Hedging by placing 5 longs on the longs.

I think the other Hedge option would have been short the say in this example 5 USD/JPY and long 5 EUR/JPY.

Then on a retracement from say 104.00 USD/JPY and 164.00 EUR/JPY the profits would come back in the USD/JPY and the loss would accumulate against any profits in the EUR/JPY

Of course the Hedge needs to be put on at the correct time say when the USD/JPY was at 102.00 and EUR/JPY was at a correlated 162.00

Then you could have booked a profit of around say 175 Pips if you waited say about 25 PIPS for the confirmed retracement as the Dow backed off or took profits and then at a certain point sell your longs on EUR/JPY.

As the USD/JPY continues down you close your positions when you are in a profit mode.

I would appreciate feedback on this post. I am wondering if this really is a better hedge than just Hedging again in this particular example being short 5 USD/JPY and long 5 USD/JPY instead of short 5 USD/JPY and long 5 EUR/JPY.

Have a Great Sunday and for those that celebrate Passover Don't eat any bread. Enjoy the Matzah

If the Yen weakens, then EUR and USD go up.

If the Yen strengthens, then EUR and USD go down.

So EURJPY and USDJPY should be correlated.

EURJPY is a SYNTHETIC pair:

EURUSD * USDJPY = EURJPY
  • #6,148
  • Apr 20, 2008 12:30pm Apr 20, 2008 12:30pm
Quoting SBrickman
If the Yen weakens, then EUR and USD go up.

If the Yen strengthens, then EUR and USD go down.

So EURJPY and USDJPY should be correlated.

EURJPY is a SYNTHETIC pair:

EURUSD * USDJPY = EURJPY
Bruce
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  • #6,149
  • Apr 21, 2008 12:51am Apr 21, 2008 12:51am
The near term resistance level, which must hold or a larger rebound is indicated, is 104.60/105.00 in USD/JPY, and 164.80/165.40 in EUR/JPY for that matter..

I don’t expect the rebound in risk appetites to be sustained very much longer, with the likely catalyst weak US housing data next week...so be very cautious in this week ahead..
"Building Wealth By Confidence, Consistency, & Compounding"
  • #6,150
  • Apr 21, 2008 12:57am Apr 21, 2008 12:57am
Regarding EUR/JPY, I think the price will be back and forth between 164.00-164.50 for today before hitting its stride later..
"Building Wealth By Confidence, Consistency, & Compounding"
  • #6,151
  • Apr 21, 2008 2:19am Apr 21, 2008 2:19am
Quoting anne_81
Regarding EUR/JPY, I think the price will be back and forth between 164.00-164.50 for today before hitting its stride later..
It all makes sense. Now the market and perception will decide. BOE about to put new plan in place. Stay tuned. More bad news is good news. Amazing matters by the day. In the end it will be very very bad. One Trillion in Writeoffs to come.

Bruce
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  • #6,152
  • Edited 2:54am Apr 21, 2008 2:39am | Edited 2:54am
anyone agree USDJPY will drop until 103.00 for today
daily pivot for USDJPY 103.53
  • #6,153
  • Apr 21, 2008 3:49am Apr 21, 2008 3:49am
Quoting Ultraman
anyone agree USDJPY will drop until 103.00 for today
daily pivot for USDJPY 103.53

If The Dow Goes So Goes USD/JPY and if not then 103.00 is possible !

Good Morning All !!!


Bruce
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  • #6,154
  • Apr 21, 2008 7:31am Apr 21, 2008 7:31am
Quoting SBrickman
If the Yen weakens, then EUR and USD go up.

If the Yen strengthens, then EUR and USD go down.

So EURJPY and USDJPY should be correlated.

EURJPY is a SYNTHETIC pair:

EURUSD * USDJPY = EURJPY

The EUR/JPY had a low of 163.865 and now is heading to it's high at 164.59

It presently is at 164.55 Bid

However USD/JPY all of a sudden is not going up with it as it now trades at 103.42

EUR/USD has risen from a low of 1.57906 to the present 1.5913

Any idea where the previous correlation is not working at the moment ?

Thank you for any ideas on this.
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  • #6,155
  • Apr 21, 2008 7:39am Apr 21, 2008 7:39am
Quoting Warren Forex
The EUR/JPY had a low of 163.865 and now is heading to it's high at 164.59

It presently is at 164.55 Bid

However USD/JPY all of a sudden is not going up with it as it now trades at 103.42

EUR/USD has risen from a low of 1.57906 to the present 1.5913

Any idea where the previous correlation is not working at the moment ?

Thank you for any ideas on this.
EUR/USD * USD/JPY = EUR/JPY

1.5913 * 103.42 = 164.57 calculated vs. 164.55 actual

Do you believe a 2 pip difference means the correlation is not working?
  • #6,156
  • Apr 21, 2008 7:47am Apr 21, 2008 7:47am
Quoting Warren Forex
The EUR/JPY had a low of 163.865 and now is heading to it's high at 164.59

It presently is at 164.55 Bid

However USD/JPY all of a sudden is not going up with it as it now trades at 103.42

EUR/USD has risen from a low of 1.57906 to the present 1.5913

Any idea where the previous correlation is not working at the moment ?

Thank you for any ideas on this.
To possibly answer my own question as I see the EUR/USD flying up to 1.5943 Bid and the EUR/JPY flying up to 164.62 and USD/JPY going to 103.25,
I would assume that the selling of the USD VS The Euro and The Selling of the Yen VS the buying of the Euro is being overpowered by more sales of the USD than Selling of the Yen.

Does this make sense ?

Bruce
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  • #6,157
  • Apr 21, 2008 7:54am Apr 21, 2008 7:54am
Quoting Warren Forex
To possibly answer my own question as I see the EUR/USD flying up to 1.5943 Bid and the EUR/JPY flying up to 164.62 and USD/JPY going to 103.25,
I would assume that the selling of the USD VS The Euro and The Selling of the Yen VS the buying of the Euro is being overpowered by more sales of the USD than Selling of the Yen.

Does this make sense ?

Bruce
http://i25.tinypic.com/vhxko.gif

Not really.

The pairs are correlated.

The chart shows the actual vs synthetic values.
  • #6,158
  • Apr 21, 2008 9:07am Apr 21, 2008 9:07am
http://i27.tinypic.com/2zrgxag.gif

Even running on 1 min chart, the actual vs synthetic prices are not far apart.
  • #6,159
  • Apr 21, 2008 9:14am Apr 21, 2008 9:14am
http://i28.tinypic.com/r0wm1l.gif

Using a line chart with calculated price in orange.
  • #6,160
  • Apr 21, 2008 9:19am Apr 21, 2008 9:19am
http://i29.tinypic.com/316vwww.gif

Ok, back to the main topic.

103 or 104.. what next?
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