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USD/JPY Discussion

  • #6,861
  • May 21, 2008 2:40am May 21, 2008 2:40am
It will test it again and break up
  • #6,862
  • May 21, 2008 4:06am May 21, 2008 4:06am
Quoting uncleforex
It will test it again and break up
Hi Uncleforex,

What basis did you based on for it to break up to the 104 area?
I’m looking for a short soon seems like 103.46 is holding real good…
  • #6,863
  • May 21, 2008 4:51am May 21, 2008 4:51am
Would this pair go down to 102.45 and eventually to 100.00.

TA says it should, as the up trend is just a temporary retracement from the long term down trend. And the Daily Candlestick says:
Bearish Candle on 20 May (Tuesday)
- Sell Signal - Tasuki Line: a white line is engulfed by 2 black candles

Hope Uncle Bruce will show us the fundamental way.

I am enrolling.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy21may.png Size: 29 KB
  • #6,864
  • May 21, 2008 5:07am May 21, 2008 5:07am
Quoting baronfei
Hi Uncleforex,

What basis did you based on for it to break up to the 104 area?
I’m looking for a short soon seems like 103.46 is holding real good…
Just for the record here is why the USD/JPY came off it's low of 103.116 about 4:00 AM

It had NOTHING to do with the charts. Please keep in mind the charts NORMALLY do not reflect anything into the future other than the bias of the direction it is heading with the support and resistances.

You do not have to accept that fact but refusing to can only hurt yout success as a winning FX trader.

Now to the FUNDAMENTAL reason for the rise short term only of course. If you read my posts of Tuesday, I pointed out to watch the IFO number out of Germany released at YES, 4:00 AM...

The IFO was much stronger than consensus so what happened was the EUR/USD got stronger and the low was 1.5628 and now it trades at 1.5733 with the HIGH at 1.5749.

That caused EUR/JPY to rise as the low was 161.566 and the HIGH was 163.176 and now it is at 162.86

What happens is the YEN is sold and the Euro is bought. A Carry trade movement. That is what caused USD/JPY to hit a HIGH of 103.711 about 5:30 AM

Bottom line whenever there is a substantial movement either way you need to do your homework to discover why it rose so you can understand if there has been a sunstantial movement in the fundamentals or just as IMPORTANT has the perception changed in the markets.

Only 10 days ago there was STRONG talk of the ECB needing to CUT. With the NEW IFO being STRONGER than expected now the EUR/USD will have perception change and maybe REALITY that it will TEST 160.00 again.

Now with Oil still up and Gold still Up there is testing of USD/JPY before the North America open and USD/JPY is moving back down as it is now at 103.45

I hope you understand why you need to know more than the charts moving UP or DOWN.

FOMC minutes out at 2:00 PM... The 2 Year US Treasuries have moved up overnight from 2.31% to 2.35% so money is flowing out of that instrument as they are sold the Yield goes UP. The funds are moving into other investment instruments for the moment.

Bruce
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  • #6,865
  • May 21, 2008 5:18am May 21, 2008 5:18am
Quoting eneloop
Would this pair go down to 102.45 and eventually to 100.00.

TA says it should, as the up trend is just a temporary retracement from the long term down trend. And the Daily Candlestick says:
Bearish Candle on 20 May (Tuesday)
- Sell Signal - Tasuki Line: a white line is engulfed by 2 black candles

Hope Uncle Bruce will show us the fundamental way.

I am enrolling.

Our Timing was perfect as I started my post on the Fundamentals just before I saw your post on the technicals. Keep posting your charts as it is a big help to see the complete picture with charts complimenting the fundamentals.

Also keep in mind that most FX traders are using the charts so if they break above a certain resistance level short term the perception can change that it is going to challenge 105.00 again and it might but usually not unless there is a STRONG fundamental fact to cause it to do so that blends in with the technicals. There is VERY STRONG RESISTANCE now at 104.00 and 104.25

KEEP IN MIND always that this is a Carry Trade Currency still so a 500 Point rise in the Dow will change the FUNDAMENTALS as Risk Aversion comes back as a factor. Now Fundamentally the Dow should not go up 500 as long as Oil and Gold keeps going up for obvious reasons.

Does anyone have and comments or questions ?


Bruce
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  • #6,866
  • Edited 5:24am May 21, 2008 5:22am | Edited 5:24am
http://www.rgemonitor.com/175?cluster_id=9676


http://www.rgemonitor.com/166/United_States


Bruce
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  • #6,867
  • May 21, 2008 5:22am May 21, 2008 5:22am
Quoting Warren Forex
Just for the record here is why the USD/JPY came off it's low of 103.116 about 4:00 AM

It had NOTHING to do with the charts. Please keep in mind the charts NORMALLY do not reflect anything into the future other than the bias of the direction it is heading with the support and resistances.

You do not have to accept that fact but refusing to can only hurt yout success as a winning FX trader.

Now to the FUNDAMENTAL reason for the rise short term only of course. If you read my posts of Tuesday, I pointed out to watch the IFO number out of Germany released at YES, 4:00 AM...

The IFO was much stronger than consensus so what happened was the EUR/USD got stronger and the low was 1.5628 and now it trades at 1.5733 with the HIGH at 1.5749.

That caused EUR/JPY to rise as the low was 161.566 and the HIGH was 163.176 and now it is at 162.86

What happens is the YEN is sold and the Euro is bought. A Carry trade movement. That is what caused USD/JPY to hit a HIGH of 103.711 about 5:30 AM

Bottom line whenever there is a substantial movement either way you need to do your homework to discover why it rose so you can understand if there has been a sunstantial movement in the fundamentals or just as IMPORTANT has the perception changed in the markets.

Only 10 days ago there was STRONG talk of the ECB needing to CUT. With the NEW IFO being STRONGER than expected now the EUR/USD will have perception change and maybe REALITY that it will TEST 160.00 again.

Now with Oil still up and Gold still Up there is testing of USD/JPY before the North America open and USD/JPY is moving back down as it is now at 103.45

I hope you understand why you need to know more than the charts moving UP or DOWN.

FOMC minutes out at 2:00 PM... The 2 Year US Treasuries have moved up overnight from 2.31% to 2.35% so money is flowing out of that instrument as they are sold the Yield goes UP. The funds are moving into other investment instruments for the moment.

Bruce
Hi Bruce,
I understand about the carry trade.
But when EURO is bought and YEN is sold shouldn't USDJPY went down instead of momentarily coming up?
Thanks.
  • #6,868
  • May 21, 2008 5:30am May 21, 2008 5:30am
http://www.pimco.com/LeftNav/Viewpoi...T+May+2008.htm



Do Not Accept The Mainstream Views as they are ALWAYS behind the Information Curve...

The Masses are either sheep, uninformed, or A S S E S and are always late to the party.

Buy the Rumor ... Sell the News usually is good Investment Advice

Or We Happy at 103.31 Bid ?

Bruce
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  • #6,869
  • May 21, 2008 5:35am May 21, 2008 5:35am
ok, understand the reasoning about the eur getting stronger with the new data, making a rate cut impossible now with inflation being the issue and the strength of the german economy. the jpy then loses ground as money flows from jpy to eur. got it. i will assume that new money will flow into the jpy. am i right so far???

here is my question: which direction will we go??? the euro is stronger than usd obviously, but is the jpy??? or is is by association?? the jpy economy isn't really strong by consumer standards, unless you look at the u.s consumer buying all their exports. the japanese consumer is a dead fish, they save all of their money. if the u.s. consumer goes south, they will as well, right???

the fomc minutes will be key. if they mention that inflation is starting to be a real concern, i am going to assume that rate cuts are over. what would that do to all the currencies??? the liquidity is out there, just no one is lending money right now, that is what is hurting any sort of growth right now, at least as i understand it.
  • #6,870
  • May 21, 2008 5:37am May 21, 2008 5:37am
Quoting baronfei
Hi Bruce,
I understand about the carry trade.
But when EURO is bought and YEN is sold shouldn't USDJPY went down instead of momentarily coming up?
Thanks.
You realize of course that as USD/JPY moves down the YEN is getting Stronger. If you are trading a June Futures Contract in the YEN the price would go up. Example now a June Yen Contract of $100,000 US Dollars trades at 97.00 with the HIGH being 97.10 and the Low being 96.55

The Futures Contracts trade about 35 PIPS above Spot so 103.19 is like 100 on a Yen Contract less 319 PIPS = 96.81 Plus 19 PIPS since the June Futures Contract is almost ready for Expiry. The further out the Futures contract the more the Higher PIP spread UP.

Is That clear ?

Bruce
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  • #6,871
  • May 21, 2008 5:46am May 21, 2008 5:46am
Quoting mtrmth
ok, understand the reasoning about the eur getting stronger with the new data, making a rate cut impossible now with inflation being the issue and the strength of the german economy. the jpy then loses ground as money flows from jpy to eur. got it. i will assume that new money will flow into the jpy. am i right so far???

here is my question: which direction will we go??? the euro is stronger than usd obviously, but is the jpy??? or is is by association?? the jpy economy isn't really strong by consumer standards, unless you look at the u.s consumer buying all their exports. the japanese consumer is a dead fish, they save all of their money. if the u.s. consumer goes south, they will as well, right???

the fomc minutes will be key. if they mention that inflation is starting to be a real concern, i am going to assume that rate cuts are over. what would that do to all the currencies??? the liquidity is out there, just no one is lending money right now, that is what is hurting any sort of growth right now, at least as i understand it.
This Currency Pair is ALSO Still a Carry Trade Pair so as Risk comes back into the markets and the spread at 5.25% US Rates Before and 2.00% now narrows the One Trillion Dollars in FUNDING Currencies ... THE YEN unwinds and as they SELL the Dow they take those US Dollars and SELL them ALSO and BUY back the Funding Currency, THE YEN and Voila It Gets Stronger.

Just Look at a 30 Year Chart of USD/JPY. You will be shocked when you see where it was years ago.

The crazy thing is that the US Dollar will continue to be sold and at 2.00% it will become the funding Currency replacing the Yen and Swiss Franc.

Have I explained it properly to all that are learning NEW Stuff...

Oil is UP Over $130 so that is BAD for US Economy and GOOD for Russia.

USD/JPY is now at 103.13

Isn't it FUN when you understand what is going on and why ?

Charts only GO so far but are part of FX trading.


Bruce
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  • #6,872
  • May 21, 2008 5:48am May 21, 2008 5:48am
Stopped out at B/E wacky Euros.
Patience + Humility + Study = Success
  • #6,873
  • May 21, 2008 5:55am May 21, 2008 5:55am
Quoting Warren Forex
http://www.pimco.com/LeftNav/Viewpoi...T+May+2008.htm



Do Not Accept The Mainstream Views as they are ALWAYS behind the Information Curve...

The Masses are either sheep, uninformed, or A S S E S and are always late to the party.

Buy the Rumor ... Sell the News usually is good Investment Advice

Or We Happy at 103.31 Bid ?

Bruce

Please Read This Again and You will see what he said is so true and why as Oil holds OVER $130 and the FED is DEAD as they are now helpless to solve the problem.

Cut Rates and More Inflation as Oil goes Higher. Raise Rates and DEPRESSION is possible. Do Nothing and the FORCES of Nature and Economics take over.

Just The Facts...Just The Facts

Are you starting to understand how the GAME works as the Rich get RICHER (Bankers) and US if WE understand and be ready to benefit as well instead of following the Masses into the Financial Toilet.

Bruce
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  • #6,874
  • Edited 6:11am May 21, 2008 6:01am | Edited 6:11am
Please Enjoy your Morning and keep alert. Be aware and Trade the Bollinger's if you Day Trade. Watch the Data and BE AWARE FOMC minutes at 2:00 PM might have short term affect on the market. Watch price of Oil, Gold, Level of Dow and 2 Year US Treasuries to See Where The Money is going...

Watch EUR/JPY for reasons explained already earlier this morning.

Have FUN and Make Money and Post Charts once in awhile.

Thank You and Have A Great FX Trading Day...


Bruce


P.S. PLEASE READ...


http://www.researchrecap.com/index.p...ted-territory/
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  • #6,875
  • May 21, 2008 6:25am May 21, 2008 6:25am
Quoting Warren Forex
Please Enjoy your Morning and keep alert. Be aware and Trade the Bollinger's if you Day Trade. Watch the Data and BE AWARE FOMC minutes at 2:00 PM might have short term affect on the market. Watch price of Oil, Gold, Level of Dow and 2 Year US Treasuries to See Where The Money is going...

Watch EUR/JPY for reasons explained already earlier this morning.

Have FUN and Make Money and Post Charts once in awhile.

Thank You and Have A Great FX Trading Day...


Bruce


P.S. PLEASE READ...


http://www.researchrecap.com/index.p...ted-territory/

Can you describe me, how you trade Bollinger's band?? (short from top and long from bottom???? but how I know if the price not will be going still up or down?? (sorry for my ENG)
Veni, vidi, vici...
  • #6,876
  • May 21, 2008 6:32am May 21, 2008 6:32am
Is the next area of support at 102.60?
  • #6,877
  • May 21, 2008 6:40am May 21, 2008 6:40am
i have never traded bollinger bands. i have heard them mentioned and seen them on some peoples charts, but what is a good setting, they seem to be all over the place, and yes, how do i trade them?????
  • #6,878
  • May 21, 2008 6:57am May 21, 2008 6:57am
Im still favouring long for u/j

I know it seems short is the way to go with those 'fundamental reasons'

which can be changed anytime to suit the charts.

Geez.
  • #6,879
  • May 21, 2008 7:03am May 21, 2008 7:03am
Quoting uncleforex
Im still favouring long for u/j

I know it seems short is the way to go with those 'fundamental reasons'

which can be changed anytime to suit the charts.

Geez.

I wish you all of the best, but I am Short, Short, Short, and will be adding to it if it reaches 103.42


Good luck to you.

Ron
  • #6,880
  • May 21, 2008 7:29am May 21, 2008 7:29am
This time when u/j gOEs up into the triangle it will touch or go higher than 104.00
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