USD/JPY Discussion

Quoting Jerry

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My daily analyze for UJ targets -+10pp

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Quoting Warren Forex

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Have you noticed that when the Dow goes UP like in the last two days the EUR/JPY pair goes UP ! That brings the USD/JPY pair UP.
Why ? The Yen is sold in large amounts and the Euro is bought. When the Euro goes UP it brings the USD/JPY down in most cases as there is selling of US Dollar and in large amounts it affects the Yen.

You cannot learn this from charts other than to witness the price changing. Not one person here needs to accept what I say. However trust me when I say that is the truth of the matter. If you want to win most of the time trading Forex you need to understand it. The charts have not a thing to do with understanding much of what I just explained here. Again no debate is needed on this as it is what it is. Discussion is great in order to understand as we have done in both our posts. FTP moves markets.

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Quoting branco

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Why do you relate the JPY crosses to the equity markets? Have you tried relating it to the bond market? I think the reason most people relate it to the equity market is that in recent years bonds and equities have been both moving in the same direction but that is not true these days.


If you relate it to the bond market you will get a better explanation of why we are in an uptrend since March on the JPY crosses. I am on the long side of GBP/JPY since 198 and have accumulated for two occasions when it came near the trendline beeing the last one this week when it came down to 209 and everyone was saying that "now the downtread will resume".


Using fundamentals is good and I use it in conjunction with technical analysis (always that fundamentals set direction and TA gives me the timing to enter the market) but how can we both be doing the same thing and be on the opposite side of the trade?

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Quoting Warren Forex

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Have you noticed that when the Dow goes UP like in the last two days the EUR/JPY pair goes UP ! That brings the USD/JPY pair UP.

Why ? The Yen is sold in large amounts and the Euro is bought. When the Euro goes UP it brings the USD/JPY down in most cases as there is selling of US Dollar and in large amounts it affects the Yen.



Fundamentals + Technicals + Perception !!!

Good Trading To All !!!


Bruce

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Quoting Warren Forex

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There is NO QUESTION about the Correlation between the Dow and The Carry Trade !

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Quoting branco

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I think you need to leave more room for doubt in your assumptions... how do you justify EUR/JPY hitting all time highs this week with the DOW at 2 years low?


What was the spread in March when he hit the bottom (for now) in the JPY crosses?


Why, with equities in downtrend, would the japanese be buying the Dow? Don't you think they were doing the carry trade this last 3 months and buying oil (quoted in USD) instead?

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Quoting Warren Forex

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By Oil dropping and the Financials recovering there was a BIG move in EUR/JPY as The Carry went back on there !

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Quoting branco

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It was you who said that. Still you are unable to explain how the Dow can be at 2 year low and that cross can be at all time highs.


The JPY crosses are governed by the bond market not by equities. Your research only works on the past few years because that was a time when both yields and equities were rising at the same time.


On March this year that relationship broke has the market perceived that the rate cuts were coming to a halt. Equities continued to plunge but the crosses continue to go up.


Your researched facts do not match reality:
Dow @ 17th March: 11955

Dow @ 17th July: 11446


USD/JPY @ 17h March: 97.33

USD/JPY @ 17th July: 106.26


Do you notice how one is down and the other one is up? Can you try to consider the notion that you don't know everything and that the premises under which you operate have a possibility to be wrong?


Believe it or not, I am only trying to help you. If you are profitable shorting the JPY crosses then go ahead and repeat that process until you get tired of being rich... I guess I'll do the same from the long side and let the interest rate differential help me out a bit.

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Quoting branco

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I did not find the chart for the shorter bonds so here I post the comparison between the 30 year note (red) and the 10 year note (blue).

I think what you are seeing as "spread narrowing" is really the long term note heading down. Compare with the graph of USD/JPY and I think you'll find that the 30 year bond is more important than the faster maturity ones.

This I am not really sure and would need further study.

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Quoting Warren Forex

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In this business you cannot have doubt. You either know or you do not. I talk about the facts only. Researched properly.

Bruce

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Quoting Camel Trader

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By the way - when looking at interest rates such as bond yields, I think it's helpful to add two things to keep in mind:

1) Adjust for inflation and get the real interest rate - nominal rates may look good but when you factor in inflation they may not be as pretty. Or when you have deflation, a weak looking nominal rate could be great!


2) Remember that currencies trade in pairs - one country's yields could be great and the other country's really, really, really great. Just because one goes up doesn't mean the currency will trade higher relative to every currency.

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Quoting dove_alliance

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Camel_Trader .... Check your PM.... I should say your email since you don't have a PM.

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Quoting Camel Trader

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... You have to realize that you can't possibly gather as much information or digest that information as thoroughly, accurately or as quickly as the big players. They have hundreds of incredibly bright people working around the clock to digest this stuff. They have resources that we can't even possibly imagine. Many of them know the information before it's even public. Once you figure out the direction you think it should go, it's already on it's way!

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Quoting Camel Trader

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In my humble opinion, I think that is an incredibly dangerous attitude to take. I actually think doubt is healthy. The truth of the matter is that no one really knows! Doubt allows you to admit you are wrong and get out of a losing trade quickly. There are so many forces driving the price and no one can control, influence or follow all of these forces.

We have economic data reports, interest rate levels, monetary policies, trade flows, investment flows, political and geopolitical fundamentals just to name a few. And from dozens of different countries! The information never stops!

Not only that but no two people interpret all this data the same way. You may say "oil is going up, that's bad for the USD" while the majority of other people may say "it's not going up as much as I thought" or "yeah, I knew it was going up three days ago" and it's already priced into the market".

To me the movement of a market is like a train and I'm just a hobo stealing a ride. I'm not trying to drive this train or predict the exact destination or route. My chart is like a map. I have some hand drawn points of interest I've made from past trips (support/resistance lines, fibo, trend lines, etc) but I know that doesn't mean this train will stop at those same places or follow the same course on this particular trip. I just know that I want a train (price) to go north (up) or south(down). Since theses trains (price) can't go west (this train starts along the Pacific coast ) I wait til I see one that is leaving the station in the direction I want to go at that particular time and hop on! We head north then north east and may even head south for a few minutes to get around a mountain (temporary resistance) before continuing on north. Eventually the train conductor (big market players) gets new information from headquarters (news, interest rate hikes, etc) and has to turn the train around or head in a different direction. When I'm unsure of this new direction or the train heads east for too long, I jump off because we might be pulling into a rail yard to reverse course and I don't want to get beaten up for freeloading. I'll then just wait to see another train (price movement) and hop on that one!

I don't need to know every detail of how the train works to go for a ride. I stay off little commuter trains that can can turn around quickly. I try to hop on trains that are going on a long trip and I don't try to get on at the very beginning of the trip and I don't try to stay on til the very, very end of the trip.

Bruce I respect your opinion and information but I don't think you "know" as much as you think you know. You seem like a guy that would try to stand next to the conductor and say "where we going boss? Mexico, we're headin to Mexico aren't we!" You see the indicators like sunglasses, sun tan lotion or maybe a travel book on Cabo San Lucas (interest rates, DOW , Oil prices) and you "know" this train must be heading to Mexico. The conductor just laughs and heads north towards Canada. It seems he has a few stops to make before eventually heading south again.

ok - enough of the analogy.

You have to realize that you can't possibly gather as much information or digest that information as thoroughly, accurately or as quickly as the big players. They have hundreds of incredibly bright people working around the clock to digest this stuff. They have resources that we can't even possibly imagine. Many of them know the information before it's even public. Once you figure out the direction you think it should go, it's already on it's way!

I do respect you for some of the information you share because it seems to explain what just happened. That of course doesn't help me to make money because the price move has already occurred. It's like me feeling something wet on my arm and you saying "it's raining" ten minutes later. I wasn't sure whether someone spit at me, was shooting me with a squirt gun or whether it was raining. What would be nice is if you would say "hey open your umbrella, it's gonna rain any second!"

You may say that it shows we are heading in a different direction but I can already see that since the price moves faster than you can read, interpret and type.

I'm happy you are successful and make lots of money BUT I've only heard of Bruce Springsteen, Bruce Jenner, Bruce Hornsby, Bruce Willis and Bruce Lee and I doubt you're any of those people. If you knew as much as you think you know, you'd be so rich you'd be a household name.

Sharing your ideas is nice but preaching like you have a crystal ball is dangerous to people that may be foolish enough to believe you actually do.

Don't let your ego write checks your brokerage company will cash!

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Quoting ak4x

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I've grown accustomed to the long posts on this thread anymore being foot long cut and pastes from yet another thread on this same forum, that if I really wanted to know that sort of thing, I'd go to Rueters or Bloomberg or wherever and read the whole thing, not just an excerpt of it that someone else has decided I can't live without knowing.

This was a pleasant surprise. Things many of us already know and can always use a reminder of from time to time...
Well done camel trader...

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