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USD/JPY Discussion

  • #12,961
  • Jul 10, 2009 10:25am Jul 10, 2009 10:25am
Yep I am watching.....lets see some consolidation first.
The only way to get smarter is by playing a smarter opponent.
  • #12,962
  • Jul 10, 2009 11:46am Jul 10, 2009 11:46am
Hello!

I would just like to ask, why does it seem that when risk aversion emerges, the USD loses its ground with the JPY? Whereas if it was the EUR or the GBP, it manages to appreciate...

Does it mean that the JPY is much safer than the USD?

What factors do interplay in this?

Thank you very much!
"No trade is still a trade." - Peter Borish
  • #12,963
  • Jul 10, 2009 11:55am Jul 10, 2009 11:55am
Keep in mind that the BOJ watch this closely and will start to intervene if the Yen keeps strong.
  • #12,964
  • Jul 10, 2009 2:57pm Jul 10, 2009 2:57pm
Shorts should be careful here, as previous poster said, no one wants a stronger Yen here, so if falls further BOJ intervention likely. I am expecting t to retrace back to mid 95's-96'0 next week.
Its all in the mind.
  • #12,965
  • Jul 10, 2009 3:31pm Jul 10, 2009 3:31pm
BOJ will intervene which is what makes yen pair such good trading vehicles...traders appreciate two way markets...I'm a bear now though
  • #12,966
  • Jul 10, 2009 3:38pm Jul 10, 2009 3:38pm
Quoting Trout
BOJ will intervene which is what makes yen pair such good trading vehicles...traders appreciate two way markets...I'm a bear now though
Trout, they just agreed not to intervene into markets anymore during the G8, or you reckon it's all blah blah?
  • #12,967
  • Edited 4:03pm Jul 10, 2009 3:44pm | Edited 4:03pm
Quoting Lbrto
Hello!

I would just like to ask, why does it seem that when risk aversion emerges, the USD loses its ground with the JPY? Whereas if it was the EUR or the GBP, it manages to appreciate...

Does it mean that the JPY is much safer than the USD?

What factors do interplay in this?

Thank you very much!
Lbrto,

Yep, since the gold standard was abolished by the US and a series of Japanese gov decisions over a course of history, Japan proven to be more conservative in their approach and hence indirectly won the status of the safest currency in the world. If to rate the major currencies starting with the safest first, my list'd go as follows (starting from position 5 it gets harder to measure up the risk):
1. JPY
2. USD
3. CHF
4. EUR
5. GBP
6. CAD
7. AUD
8. NZD
....
255. Zimbabwen buck.
  • #12,968
  • Jul 10, 2009 3:56pm Jul 10, 2009 3:56pm
depends on how you define "intervention", a simple statement by the bank gov. will send it flying high.

Having said that I am out ATM, this area, the 9150-9250 is an imp one this is confluence of many fibs and as I said before no one really likes a Yen so strong especially now that the economy is better than it was 6 months ago.



Quoting Groovy
Trout, they just agreed not to intervene into markets anymore during the G8, or you reckon it's all blah blah?
Its all in the mind.
  • #12,969
  • Jul 10, 2009 3:59pm Jul 10, 2009 3:59pm
Trout,

I'm frankly bullish on this pair. Bears may just be losing steam after weeks long rides. BoJ is in full alert, am dead sure. And i remember March pretty well when Bernanke/Geithner/Obama admin, etc.. were so active in doing just about anything to stop the Dow/Commodities slide, aka recession, it looked as if their lives were on the line. I already hear first signs, like second stimulus package with much faster implementation, no withdrawal of previous stimulus measures, more ways to ensure sustainable recovery. Time to switch on that printer again, Bernanke, kchunk, kchunk.

My bullishness doesn't stem from any particular optimism of any world economy (with some exception of China, India and Indonesia perhaps) but purely from being aware what some guys and central banks are capable of doing when that straw breaks the camel's hump and things seem to approach this condition once again.
  • #12,970
  • Jul 10, 2009 4:32pm Jul 10, 2009 4:32pm
Hi Groovy,

I was wrong a month or so ago on Yen when I thought it would keep going higher when stocks were making higher highs -- I thought maybe yen was passing baton to equities for a bear maket rally, but intermediate and long-term trend on monthly usdjpy held -- yen proved to be a leader again. I could be wrong again on this end, but technicals say stay short.

We could see a second and even a third stimulus package before it's all over. Obama is still too young to understand that what will be will be, and too idealistic to listen to old guys like Paul Volker and Bob Rubin.

Big money knows though that the most important part of money managment is protecting your principal, and the Japanese are very good at that...
  • #12,971
  • Jul 10, 2009 4:45pm Jul 10, 2009 4:45pm
I'll be in the bear camp as long as otherwise is proven based on technies. So far, I see the test of the 87,2 for the last low and after it breaks it(won't take long) the 78,4 is on cards by November. That's pure technical and IMHO BOJ won't put much effort to save THE CURRENCY.
  • #12,972
  • Jul 10, 2009 5:02pm Jul 10, 2009 5:02pm
What is the rationale behind this prediction? Economy is better than what it was 6 months ago. It is mixed signals but earlier it was just pure pessimism.

I think a 78 level call is absurd- 91 would be the bottom of this move. We will see a 95-96 soon enough. we are at 61.8 of the 87-101 move and up is where it goes.

Quoting pipsbull
I'll be in the bear camp as long as otherwise is proven based on technies. So far, I see the test of the 87,2 for the last low and after it breaks it(won't take long) the 78,4 is on cards by November. That's pure technical and IMHO BOJ won't put much effort to save THE CURRENCY.
Its all in the mind.
  • #12,973
  • Jul 10, 2009 5:46pm Jul 10, 2009 5:46pm
Quoting 5abi
What is the rationale behind this prediction? Economy is better than what it was 6 months ago. It is mixed signals but earlier it was just pure pessimism.

I think a 78 level call is absurd- 91 would be the bottom of this move. We will see a 95-96 soon enough. we are at 61.8 of the 87-101 move and up is where it goes.
i have a technical approach,
here is weekly chart and it shows that yen has been in the bear fall for 2 years keeping itself in the nice channel. The vertical yellow lines are showing fibbonaci time. Taking and applying it on the chart using last high and low to point out the next major reversal, which it did by breaking out of the correction run from the lows of 87, testing it again and booom. Considering that it is a bear channel(lower low and lower high on weekly) the next stop is the last low of 87, but once the stocks starts to fall, yen appreciation will kick in again, and I doubt it will be going down to form double bottom on FE61.8. That's why I see possible 2nd stop at the lower TL or on FE100.0 in the virgin territory. Time will tell and hope I was clear...
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  • #12,974
  • Jul 10, 2009 8:32pm Jul 10, 2009 8:32pm
I am actually not denying that it may bounce back up to the 95 level. Especially if you take in consideration it's last summer behaviour, when it was ranging making LL and LH after which it finally broke out. Looking on daily chart it found some support on lower TL, so pull back is quite possible due to that fact and timming. What I was trying to show with the weekly chart is the long term picture imho.
Talking about that the economy is better...hmmmm... I'm confused. What is that based on? The US lost all jobs it had created in 21st century and keep losing, the prices of the houses are still can't find firm bottom. Plus the credit card default may become quite a danger soon. And the last rally in stock market is just the bull breathe in bear market.
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  • #12,975
  • Jul 11, 2009 5:38am Jul 11, 2009 5:38am
I read an article from K Lien mentioning that 4 new FX denominated investment trust had been launched on Friday. I tried finding details but in vain......Anyone has any link on this???

BTW when UJ was around 87-88 last year, BOJ clearly mentioned that they do not want it lower than 87. It was easy bucks that time. A month or two ago nakamura or someone said about volatility of UJ and it went up. Research papers show their 2004-2006 interventions had mixed results and they also accepted it in the recent article. When BOJ was intervening UJ was above 100 always but now it is trading way lower than that and still there no concrete proof of their intervention. Till now they are talking only and probably think that this phase of Yen strength is just temporary.

Anyway if anyone has article link for the new funds launched on friday please post here...
The only way to get smarter is by playing a smarter opponent.
  • #12,976
  • Jul 11, 2009 6:10am Jul 11, 2009 6:10am
Yeah USDJPY is definitely one where you want to sell a rally, or if a bull buy a dip...it generally doesn't pay to play breakouts on an end-of-day basis
  • #12,977
  • Jul 11, 2009 6:31am Jul 11, 2009 6:31am
I think the following factors may have made the pair drop this much-

1) The building up of negative feelings about the equities crashing, commodities crashing etc- that is, recession is not going to be over anytime soon, so people flock to safe haven Yen and the japanese guys bring back their Yen from overseas investments.

2) Everyone knew how long people were when it traded at 95, right? I mean if you are a big bank or a large trader you knew how everyone was long due to the recent range and stuff, so they decided to play ball with these longs and drop the ball.

3) The earning season is now around. So If I am a big bank trader I would say to myself to hell with these people who are long, I will just sell, in any case the earning reports are due soon and there is an impending doom and gloom so any ways I can buy back cheap later.

Guys, that Cheap could be now, here. It all really depends on how the earning reports get received this week. Add to it the economic reports like housing and employment.

I have a feeling that these numbers are going to show improvement, and the earnings would not disappoint this month either. If I were to take a bet I would say this pair goes up. This quarter was not all that bad-better than Q1. The Pair dropped so that the big guys could have made a killing buy it back now. If that was not the case we would have not seen the kind of resistance at 91.70 is levels.

Rest you all be the juddge, I know come Monday, what I would be doing
Its all in the mind.
  • #12,978
  • Jul 11, 2009 6:43am Jul 11, 2009 6:43am
Hi PipsBull,

Weekly tech analysis is good. Economy may yet be in shambles too. It feels nice to say something will happen and it actually does go that way!!

But does it really matter if it goes to 87 or 78 after 6 months? I mean You may short it here at 93 and it goes back to 97 taking your stop and money with it.

So I would rather look at what it might do in next one week or so, buy at 9250, stop at 9150, and make money, then when it reaches at 95, I short there and stop at 9600 and make some money. That is all is there to it, No?

So I agree with your long term analysis, we are still in a southbound channel, but what good will that be to me if it does not fetch me money.

Yeah, I may be wrong, if you are a long term kind of guy, and believe 87, 78 is next, I would bet the house on it and wait it out.

WRT Economy, the idiots have printed a lot of money, but in process they have also wiped out billions of bad debts. This has been a long recession, and it ought to end somewhere now. but well am not an expert on this and even the experts have no idea what is going on...so all I can do is trade whatever way it goes.

Quoting pipsbull
I am actually not denying that it may bounce back up to the 95 level. Especially if you take in consideration it's last summer behaviour, when it was ranging making LL and LH after which it finally broke out. Looking on daily chart it found some support on lower TL, so pull back is quite possible due to that fact and timming. What I was trying to show with the weekly chart is the long term picture imho.
Talking about that the economy is better...hmmmm... I'm confused. What is that based on? The US lost all jobs it had created in 21st century and...
Its all in the mind.
  • #12,979
  • Jul 11, 2009 6:47am Jul 11, 2009 6:47am
Quoting 5abi
I think the following factors may have made the pair drop this much-

Guys, that Cheap could be now, here.

I have a feeling that these numbers are going to show improvement,

Rest you all be the juddge, I know come Monday, what I would be doing
Awesome man....you got it all figured out
The only way to get smarter is by playing a smarter opponent.
  • #12,980
  • Jul 11, 2009 6:51am Jul 11, 2009 6:51am
well that is at least how my puny brain "understands" this. It would be even better if additional info or an alternative theory was presented? Thoughts

Quoting NewFX
Awesome man....you got it all figured out
Its all in the mind.
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