Geppy's Geppy Thread (GBP/JPY)

agreed but 167.75 must go to be sure...

Olu

Yes Didgeridoo. To enter, I generally look for all EMA averages to consolidate, ( the longer and more constricted the better) and then to expand and fork in their sequential layers in a direction. I use price action, candle sticks and a tick chart (for rate of volume) to determine exiting. I don't need to know why it happens, just react to the market condition. This method keeps me from having to guess exactly where and when directional change occurs. I just have to be awake to take advantage of it. Do not try this in a whip saw condition I call Crazy Ivan because the spread will wipe your profits out especially on 300K + and 10-15 pip trades.

Now the market closed, let's have a look at daily chart. It said that during the last week, it was in a range between 167.75 and 169.70 distributed in five candles.

Before this, i read that many were following to be long and really very few tracking the short.

To traders were thinking to go long, i have a question: what if we erase those five candles, do you come back to think long again or will you change mind to go short?

Why this question? Usually forex works at the less probability and with the unexpected. You can wait a long for an evident bullish flag that will never realize its target or its direction, same for head and shoulders, triangle, harmonic patterns..etc etc. Experienced traders got a tons and mountains of frustration and was nervous a number of times they never could remember. So what i wanted to say is putting the probability (even i was in bearish view from the beginning), what if you were right and i would be wrong, so this week was only to shake us for changing our mind to give illusion that it will go south but it will continue to be bullish.

In my analysis ( http://www.forexfactory.com/showthre...76#post7354076 ), i'm still convinced that we will go south, but experience in forex is telling me to prepare at the unexpected even i am convinced i am right.

What gives me this doubt, three things: The first is what i said yesterday: "The strange thing in the story is JPY still standing in a very small range", the second is the yoyo of yesterday and the third is these five daily candles aligned like a soldiers with no direction (consolidation to lower or prepare to reversal?)

Usually in FF we give our opinions in one direction, but GJ is the thread of the fastest currency and fastest means sometimes hundred of pips in few times. It really deserves to analyze again and again the point of view and its opposite. $ is the target.

I'm hearing conflicting schools of thought on further stimulus from the BOJ now. One from Kuroda is that Japan is on the path to the 2% inflation target and that the BOJ is ready to act if the new tax dampens the economy. The other is from Yale professor Koichi Hamada; He thinks the BOJ should maybe double down in a couple months to 100 trillion Yen a year and not wait to see the effects of the tax on the economy because then the damage would already be done.

I think we are going to be entering into a zone of more extreme misbehavior by the banks that will show up on the price action. Whatever they do they sure don't want you to be long when that BOJ announcement hits. The last time in order for the exchange rate to reflect that kind of volume in bond purchases GBP/JPY went up 1,800 pips in 3 days. I say another 10 billion dollars a month would be worth 400 in a day but to double down on it? Hmmm.

Do you mean long on JPY or GBPJPY?

Hi Temujin... looking forward to another fun week of trading...

I came across this article not long ago...

http://www.bloomberg.com/news/2014-0...an-credit.html

It suggests that an increase in inflation is effectively reducing wages of all but the wealth. And any increase in taxes will only make the situation worse.

I haven't looked into the Japanese economy enough to understand it completely, but it's not rocket science to understand that even though the BOJ monetary stimulus is stimulating the economy it is also starting to have some negative effects as well, thus it can not go on indefinitely.

I'm short until 166.00

Haha! Just like here in the U.S. The Fed's Fisher said QE was a massive gift intended to boost wealth, lol. Yeah, the QE is largely for Japan INC. Not the working man for sure. Abe was almost forcing firms to raise salaries because of the inflation, lol. Thanks for the Bloomberg piece Caldera.

Sorry if I wasn't clear, long the British Pound against the yen.

Looks that way but I'd like to see the HSBC Flash PMI before I get in either direction. The Nikkei opened higher but now it's as if they would like to see the numbers also before proceeding much higher.

An 8 month low on HSBC Flash PMI was reported. I went short EUR/JPY at 141.24.

Wow look at the yen crosses go, surging on the bad data.

Agreed...
GJ Opened on a gap down, recovered, then sped forward on bad economic data...what's next?

Goodness! I had to cut that losing trade. The Nikkei is determined to have their relief rally near that crucial 14,000 level bad data or not. The last 2 days we've seen EJ and GJ break down but with no follow through in Tokyo right now. Do they resume a limited uptrend? GJ to 169.54? I can't see it at all because that would be the 6th attempt to breach it after rejecting it 5 other times last week.

Another possibility is the 169 area top and it just went to last Friday's zone of refusal.

JPY started weakening just as Tokyo opened for the day.

And Tokyo has their break and it strengthens (GBP/JPY lowers).

Short at 169.981

seems like a good entry point

Over 250 points on the Nikkei and it had to happen at that technical level but I thought the China data would knock it down. It's being reported everywhere as evidence of a downturn. So the question is whether this is a divergence of that GJ break down or will the area hold for a staging platform of a new upward channel. All the fundamentals say no. BOJ is too far away, BOE is not expected to raise rates. There is just nothing really exciting to propel it onward and that sales tax kicks in APR 1. Many really see it as a humbug to put a damper on the economy and without the speculation of more stimulus the market won't like that uncertainty.

This is a tough one and a place I could start to rack up losses. It's been in this area for 6 trading days not including this open. Perhaps the best way to play this is to scalp sessions until a true direction emerges. Another troubling thing to me is the recent disconnection from the S&P. They were once lockstep but not now at all. I've seen NY sell off and GJ rise and vice versa.

We must be a couple months away from that powerhouse BOJ stimulus coming online. Bank mischief is increasing.