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USD/JPY Discussion 12 replies

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USD/JPY Discussion

  • #21,921
  • Dec 16, 2010 3:54am Dec 16, 2010 3:54am
Quoting fosking
Four possible fundamental reasons to be bullish on the USD/JPY come from:
2. Once the US starts raising interest rates again money will start flowing out of Japan and back into USD dominated accounts.
When do you think this will happen? As long as US has such a high military expenditure to pay and so many trillions of debt still curculating in the system...and such a miserable economy.... I would believe that the interest rate is going to stay at or near zero for years to come....

What would make US raise the interest rate anyway? What could be a scenario in your opinion?
this pig cannot be slaughtered for ever... or can it?
  • #21,922
  • Dec 16, 2010 4:31am Dec 16, 2010 4:31am
Quoting georgem
When do you think this will happen? As long as US has such a high military expenditure to pay and so many trillions of debt still curculating in the system...and such a miserable economy.... I would believe that the interest rate is going to stay at or near zero for years to come....

What would make US raise the interest rate anyway? What could be a scenario in your opinion?
One of THE biggest fundamental reasons for currency fluctuations over the long term are interest rates. When a country has a high interest rate, that country becomes more attractive to investors than a country with a low interest rate.
The Japanese economy has a low interest rate, whilst under normal market conditions doesn't make it an attractive place to save your money.
The US economy as you said will not see a substantial rise in their interest rate for a reasonably long time, for the simple reason they want to see people spending again. On the other hand, rates in the US cannot be left at their current levels for too long a time, as inflation becomes a problem and once again one of the most solid ways to solve this problem is through interest rate rises.
Once we see clear strength in the US recovery and any hints of the US starting to raise interest rates, money will start to drain out of Japan and back into US dominated accounts.
The chart attached is of the weekly over many years, so to expect this to happen over the short term is fundamentally wrong. The one thing I am trying to portray is that over the long term after the financial crises, the overall trend of this pair will tend to be bullish due to the interest rate gap.
  • #21,923
  • Dec 16, 2010 4:35am Dec 16, 2010 4:35am
Option Expiries seen today in USD/JPY at 84.00/25
  • #21,924
  • Dec 16, 2010 4:52am Dec 16, 2010 4:52am
i think now jpy have make its necessary correction and now the pair gonna follow its bullish trend.
  • #21,925
  • Dec 16, 2010 6:12am Dec 16, 2010 6:12am
Quoting fosking
Here's a closer look at the USDX with resistance around the 80.25 area.

USDX
Attachment
Updated, with the USD/JPY still rising, resistance still remains around 80.25. Although we are starting to see some downwards pressure.

USDX
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  • #21,926
  • Dec 16, 2010 7:57am Dec 16, 2010 7:57am
well, 84.37 seems like a tough line of defense.. come let it go guys....LOL.....!
i say its gonna be broken,if and only if EUR, AUD, GBP hit 120 points down from the high today.......have a nice pips everybody!
  • #21,927
  • Edited 9:22am Dec 16, 2010 8:53am | Edited 9:22am
Moody's places Greece's BA1 rating on review for possible downgrade
rating agency comments
Source: RTRS

UPDATE: Wires now running correction on S&P comment on Greece, revising it to just Moody's who has commented.

Moody's says multi-notch downgrade possible if debt-to-GDP ratio fails to stabilize over next 3-5 years, or EU support turns to be less strong after 2013.
IMF's Strauss-Kahn says unless Europe cooperates the crisis will never end.
  • #21,928
  • Edited 9:25am Dec 16, 2010 9:12am | Edited 9:25am
Roubini says Spain is closer to a critical point and says ECB 'worried' about its own solvency.

Looks like they are out to slaughter the Euro tonight lol

Roubini predicts US unemployment will remain above 9% in 2011 and inflation is currently not a problem with the US currently needing a weak Dollar.
IMF's Strauss-Kahn still on the wires saying recovery in Europe sluggish, Asia, and South America are doing rather well.
IMF Strauss-Kahn says US 2011 economic outlook uncertain, and will help determine global recovery.
  • #21,929
  • Dec 16, 2010 9:27am Dec 16, 2010 9:27am
why do people listen to moodys and consorts is beyond me anyway...

Roubini at least seems to be an intelligent guy.
this pig cannot be slaughtered for ever... or can it?
  • #21,930
  • Dec 16, 2010 9:32am Dec 16, 2010 9:32am
Quoting georgem
Roubini at least seems to be an intelligent guy.
He's come out saying he expects a QE3, QE4 and possibly a QE5. I guess he's not called Dr Doom for nothing.

I agree these rating agencies have far too much power.

IMF's Strauss-Kahn says if European economy worse than forecast, then may have to review aid programs.
IMF's Strauss-Kahn says worried about contagion in Europe.
  • #21,931
  • Dec 16, 2010 9:37am Dec 16, 2010 9:37am
Quoting fosking
He's come out saying he expects a QE3, QE4 and possibly a QE5.

I agree these rating agencies have far too much power.
That would be great for the EUR.

I mean the more crazy stuff the FED is doing in the future, the more will clever investors seek an alternative to the USD, and that will always remain EUR (or what would you propose?).
At least here in Europe the people are complaining and fighting and realizing they have problems.
This is an inherently good thing, lets not forget that.

Inserted Video
this pig cannot be slaughtered for ever... or can it?
  • #21,932
  • Dec 16, 2010 10:05am Dec 16, 2010 10:05am
Quoting georgem
That would be great for the EUR.

I mean the more crazy stuff the FED is doing in the future, the more will clever investors seek an alternative to the USD, and that will always remain EUR (or what would you propose?).
At least here in Europe the people are complaining and fighting and realizing they have problems.
This is an inherently good thing, lets not forget that.

http://www.youtube.com/watch?v=ZE45NzgJaxY
Haha I love these Nigel Farage clips.
You are right the smart money is not going into the USD it's purely being played as an anti Euro trade.
Once the problems are solved and settle down throughout the Euro Zone (which I believe will be the case) then we will have a more stable solid Euro.
New legislation and whatever new stabilizing features will be brought out to make the Euro Zone a stronger and more transparent economy.
Throughout the middle east and Russia they have been buying up Euros by the bucket load.
It's true when you hear people shouting sell, sell, sell it's probably time to buy.
Yesterday I posted in the EURUSD thread that Market talk of 10-month double-no-touch EUR/USD option expiry at 1.30/1.60 with 15mln payout was being played with not a single person agreeing and just one reply saying they will give it until the end of the week..
It's true when Warren Buffett preaches you should be fearful when others are greedy and to be greedy only when others are fearful.
  • #21,933
  • Dec 16, 2010 10:13am Dec 16, 2010 10:13am
Anyone thinking to go long?
Little luck is forex water. Learn all Trading strategies, then forget them.
  • #21,934
  • Dec 16, 2010 10:31am Dec 16, 2010 10:31am
Long 2 lots from 84.20. 1st TP 85.00. SL 83.90. Stop and reverse at that level for 50 pips with 4 lots. Again entry for 84.20 level and 2nd target 85.80. Simple SL used. Should market show counter indication, i'll exit immediately.
Little luck is forex water. Learn all Trading strategies, then forget them.
  • #21,935
  • Dec 16, 2010 10:41am Dec 16, 2010 10:41am
Short from 84.25, SL 84.49, TP 83.60. Fibonacci.
  • #21,936
  • Dec 16, 2010 11:38am Dec 16, 2010 11:38am
Quoting Alki
Long 2 lots from 84.20. 1st TP 85.00. SL 83.90. Stop and reverse at that level for 50 pips with 4 lots. Again entry for 84.20 level and 2nd target 85.80. Simple SL used. Should market show counter indication, i'll exit immediately.
Out at 84.13. 7 pips lost. Unclear behavior. Waiting to see better opportunity.
Little luck is forex water. Learn all Trading strategies, then forget them.
  • #21,937
  • Dec 16, 2010 11:58am Dec 16, 2010 11:58am
Quoting Alki
Anyone thinking to go long?
been long since 82.4 - still adding every dip - bumpy ride so far, but she's still got plenty of juice left...imo
  • #21,938
  • Dec 16, 2010 12:15pm Dec 16, 2010 12:15pm
Quoting Alki
Anyone thinking to go long?
Not really... I am on the sidelines... will trade when we are +70 or -70 pips from where we are now.
this pig cannot be slaughtered for ever... or can it?
  • #21,939
  • Dec 16, 2010 2:40pm Dec 16, 2010 2:40pm
Going into the final trading session of the week, price has started consolidating breaking the ascending trend line and currently bouncing off the 0.382 Fib level at 83.87 (Tuesdays low to Wednesdays high).
A break through this Fib level takes us to the 50% Fib Level and Daily Pivot S1 at 83.67/70 respectively. This level is an important one as it has been tested as both support and resistance this week.
A move further south takes us to the 83.50 area with the weekly Pivot Point, Daily Pivot Point S2 and the 0.618 Fib level with stops under this area, so an overshoot can be expected if this level is reached.
The currency correlation indicator is pointing to more Yen strength against the USD.
Upside risks come in at the Daily Pivot R1 and the descending trend line above. Beyond these resistance levels we have a cluster of resistance levels as can be seen on the chart below with reported stop losses around the 84.60 area, again, these will be targeted if the opportunity arises. I would be careful selling into any strength on a move higher (obviously determining how price action is behaving on the up move will be key to seeking how strong the buying pressure is) I would be looking for a top and a test of this before hitting the sell button.
Not much in the way of news releases tomorrow but we do have the continuation of the EU Economic Summit, so traders will be looking for any snippets of information coming out of that.

Good luck guys!

Week So Far M5
Attached Image (click to enlarge)
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Week So Far updated with Fib Levels
Attached Image (click to enlarge)
Click to Enlarge Name: jpy2.png Size: 189 KB
  • #21,940
  • Dec 16, 2010 4:33pm Dec 16, 2010 4:33pm
I don't have much to offer in the way of TA today.....all that needs to be said, has been said by some great posters here. You can see the bullish gartley on the M30, but I'm not going to get into this now. It's a bit too late in the year for me to take any more serious trades.....I'll restrict myself to short term scalps if and when they present themselves.
Attached Image (click to enlarge)
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