AUD/USD

Should be within a few months after the second test down to 1700ish.

Did you not just see the recent strength in gold? it was very strong leading up to QE3.

Gold just hit a all time high in euro... not sure what you are talking about.

It is the only solid thing left in this war of paper. Its also the easiest to see... but like everything else its hard to find areas to go long term unless you using very low leverage.


USD? Well US is what caused this mess, and US is what needs to get us out. The era of free money is coming to an end and that means USD will rise... but valuations of US companies will keep going up because of finding more efficient ways to do business. US has accumulated the smartest ppl paying the most from around the world... they have the most leading edge technologies...

example: Nobel prize was given out to a scientist who figured out a way to observe qebits (quantum bits)... normaly if you observe a quantum bit, it ceases to exist because it can exist in more than one place at the same time. When you observe it, it dissappears. WHen you don't its there.... so this guy figured out how to determine and modify the qubit like a computer bit. Now apply this to create a computer out of qubits (30 qubits allow for 10 teraflops per second computing power)... just 30 of these will allow for the strongest computer we have. You also need little to no power to manipulate them.

Now a billions times more efficient computer, what do you think that will do to not only the internet but millions of new unheard of things we couldnt do before? Who do you think will fund these projects? Yes the USA because those banks/funds are always looking for investment opportunities and have the most capital to throw down.

Just an example.

Goog comes back online in 10minutes this should bring some vol in the market

Did it hit the 10% rule? haha

hah no it hit the lets not let the market fall and lets investigate rule. Circuit breakers coming online.

God I am so glad i trade currencies stocks are to Hollywood for me only traded options back when never liked the BS variables on days like this

thats the 10% rule

Goog off thelows... lets drink some Kool Aid

[Note that I go on about USD/JPY when 100PipsADay clearly meant AUD/JPY. But for that blunder, I think the rest of this post still makes sense.]

I agree that it's significant that USD/JPY broke the descending wedge, but it was solidly rejected from the 200 DMA which will need to be broken first, followed by a lot of significant resistance areas before it hits 88, a target that hasn't been touched since August of 2010.

It took seven and a half months for USD/JPY to fall the same distance it would need to travel back up, which makes your two month time frame somewhat unlikely, but that's not the main obstacle the Yen needs to overcome in order to hit 88.

Currency prices move in relation to other currencies, and in order for the Yen to fall that far the BoJ would have to print an economically disastrous amount of money while the USA, the Eurozone, and England all stop devaluing their own currencies; but in these economic times, no-one wants their currency to be the most expensive because it kills the exports necessary for growth so they aren't going to let that happen.

To bring this back to AUD/JPY, with all the majors devaluing their currencies, it won't be the falling Yen that brings this pair to record highs, but rather it will be the strength of the Aussie; however, if the Aussie started to gain that much strength the RBA would be forced to take measures to devalue it just like every other nation.

Basically, we are very unlikely to see record highs again in any currency pair until the global economy stabilizes, and that certainly isn't going to happen in the next couple of months.

Hi Kadc,

Thanks for your input. When I said 88 I was actually referring to AUD/JPY. This was actually hit earlier this year...

I would like to share another good article which supports my view from a fundamental stand point:

Why the yen could be today's best currency trade
by Jack Crooks
Saturday, June 9, 2012 at 7:30am


If you are a long-term player who has some patience, I consider this the best single trade setup among the major foreign exchange pairs: A core long-term long position in USD (U.S. dollar)/JPY (Japanese yen). In other words, bet that the yen will fall in relation to the dollar.The Japanese yen continues to defy its own economic fundamentals. It continues to move up and down in value, in correlation with "risk off" (stocks and growth assets moving lower) or "risk on" (stocks and growth assets moving higher). But the latest statistics and dynamics driving the Japanese economy into the future still tell me the yen will weaken in a very big way, sooner or later.

http://images.moneyandmarkets.com/2443/chart1.gif

Of late, the yen (relative value) is moving in tight, negative correlation with risk assets. Using the Dow Jones Industrial Average (DJIA) as a measure of risk assets, you can see that as the Dow falls, the value of the yen rises. On the chart below, the USD/JPY falls as the yen gets stronger relative to the U.S. dollar.

Whether you consider the yen correlation against the DJIA or the Nikkei 225 Index, it is effectively the same — concern in global stock markets means the yen strengthens. The primary reason is simple repatriation.

Japan is still a very wealthy country despite the economic calamity experienced since the bubble broke back in 1989. Its insurance and pension funds have vast amounts of investment capital. When things get ugly globally, measured by stock markets, these big pools of funds tend to rush back home to hide in local Japanese government bonds for safety.

For example, consider the relationship between the DJIA and USD/JPY going back to the credit crunch period beginning in mid-2007:However, this theory that weakness in stocks consistently means a strengthening yen, one I have discussed before, doesn't hold water if you change your perspective to the long term.

DJIA down 15.2 percent from its peak

USD/JPY down 35.9 percent from its peak

http://images.moneyandmarkets.com/2443/chart2.gif

Dollar/yen has fallen 35.9 percent, or put another way — the yen has strengthened 35.9 percent against the U.S. dollar since the credit crunch (creating huge price pressure on Japanese exporters) while stocks rose.

And when you consider that one of the major impacts of the credit crunch was the decline in global demand for goods from export-oriented countries, such as Japan and China, you can see why Japanese companies are screaming for relief from this double whammy of pain.

Japan's Soaring Government Debt Crisis

The dangers of a declining trade surplus and strong yen pressures are put quite clearly into context when you understand that Japan will likely run a fiscal deficit of a whopping 10 percent of GDP. Meanwhile its debt/GDP ratio could rise to the moon-launch level of 241 percent (roughly twice the level of Italy) this year, according to forecasts by the International Monetary Fund.

Notice in the chart below how government debt has continued to ramp up after the bubble broke in 1989. And this fits the view gaining ground that after Mr. Market is done crushing the European bond market, it turns its guns on Japan.

http://images.moneyandmarkets.com/2443/chart3.gif

Now, what makes that picture even worse is the train-wreck scenario of Japan no longer being able to fund these huge debt needs internally as the pools of private and business savings are drying up. In other words, if Japanese interest rates rise from their incredibly low levels — 0.89 percent on the 10-year Japanese Government Bond (see chart below) — the cost of funding with 200+ percent debt/GDP could shoot up exponentially.

If Japan's bonds begin to reflect real or even potential funding risk, forcing interest rates higher, it means that local demand from Japanese institutions will fall even more, putting greater pressure on rates, while the slowdown in economic activity will further reduce Japan's available pool of savings to fund this growing need.

http://images.moneyandmarkets.com/2443/chart4.gif

Japan is facing a very scary situation here. Sooner or later, the yen will begin to reflect these internal realities. I think it will be sooner. When it does, the value of the yen has a very long way to fall (USD/JPY has a very long way to rise). The long-term profit potential I see here is enormous.

Best wishes,

Jack

Yes, indeed you were. I apologize for that.

Oddly, nearly lighting my house on fire earlier and making stupid mistakes while trading that cost me money today wasn't enough to get me to go to bed, but I feel so ridiculous going on about USD/JPY when you were talking about AUD/JPY that I finally appreciate that I need to get some sleep.

Once again, I apologize for my error.

p.s. My number one unbreakable rule is to never trade when tired, yet that's exactly what I did. I'm lucky I didn't bankrupt myself (or burn my house down).

japanese are wariors. jpy reflects this. i like jpy.

gives incredible entries if you know how to approach it.

No problem kadc. Just one of those days...

Hi guys,

I like this thread,

Kadc:
What do you think about my trade, because I guess it will go down till low of 17th daily candle.

100pips nice analysis love the explanation making me look at JPY futures now lol

I should have posted the link, this wasn't my work.

http://www.moneyandmarkets.com/why-t...e-49832?FIELD9

But yes, I am confident that JPY will fall significantly pretty soon. We broke the 8 month Daily downtrend a few days ago so I'm going to be keeping a close eye on the Yen from now on.

Also, the BOJ stated that they would be doing some sort of "intervention" later in November. Not sure if this is just a rumor to try and devalue their currency or if they will actually go through with it.

Take a look at the Weekly chart, looks like it has formed a nice round bottom as well...

You brought it too my attention I would not have seen it if you did not post so you get a partial credit then lol ty

This does look compelling.....Futures 10yr Wkly chart

LOL

No problem JP

Looks like it could be a long term position trade, just your flavor!

In The first week of October, the USD gained 168 pips against AUD. The price moved down from 1.0369(monthly pivot) to 1.0155(monthly Support 1) while in the second and third week the profit made was erased with the price bouncing back to the monthly pivot. As things are, the 1.0389 pivot is providing a weak resistance to the pair. On the daily chart, if today's candle stick close above the pivot long AUD and target 1.0613(monthly resistance 1) which is the September high. If the price breaks below the 1.0320 line which happens to be the short breakout then the market may re-test the October low 1.0155 and if the price break below-er target 0.9931 below the parity.

Goodluck

Not liking equities with the Russell double top but we will see how elections shape up and October. Oil, palladium, Russell, es are all very interesting at the current time. Could be telling soon if we extend on risk or if this is a start of correction albeit a minor one.

Did not compare Gold to AU because of the face palm argument right now the correlation is mute

Gold shipments to China Surge

correlation could pick up soon between the two if this continues and revenues start to show more on the sheets