A Mid and Long Term view in AUD/JPYWith commodities collapsing and the BOJ announcing further easing and loose monetary policy, AUD/ JPY provides the best instrument to ride both the decline in commodities and the softer yen.
Boj
USDJPY: Neutral, with a bearish biasIn this chart I analyze the price action in USDJPY's weekly chart.
It appears like we have formed a balanced distribution after the lowest low in the recent selloff.
Despite this not-falling situation, rgmov continues to suggest the enviroment is overall bearish, so I'll look into fading exremes in lower timeframes, using CCI and Rgmov signals as confirmation.
Pattern traders might find an abundance of bearish patterns with the PRZ near significant profile levels, like the high and low volume nodes.
It's interesting to note that the 10 period moving averages of the highs and lows are bearish, and that the speed lines drawn using the 0.5 and 0.618 levels, and the highest and lowest price from the top as reference contain the bars in the advance as well.
Hope you find this of use, regards,
Ivan Labrie
Time at Mode FX
GBPJPY: This might be it...GBPJPY is offering a significantly interesting short opportunity, the telltale signs are there.
If we look closely, we see that price has bounced from the biggest mode in the downtrend since 1991, and could never go back over it.
In time at mode terms, we have a very clear weekly downtrend signal, confirmed by rgmov in the daily plotting a new 2 month low. This offers a very good short setup if we get a retracement entry.
Be sure to take it!
Entry would be anything above 191.91, with a stop loss slightly above the weekly mode at 193.468 (make it say 193.568)
Good luck!
Ivan.
Nikkei: Top projectionBrief EW analysis of the Nikkei index suggests we're at the top, or close to it.
As per my USDJPY/Nikkei chart, the area above is a very strong quarterly chart resistance.
A move above 23155 would invalidate this scenario, making wave 3 the smallest.
Just something to keep in mind.
Good luck!
EURJPY: Potential position trade setting upWe have an interesting scenario here, with the possibility of Nikkei topping, and the Euro on the verge of being devaluated by the ECB's monetary policy.
The setup offers a great risk/reward ratio, so I wouldn't hesitate to take it.
Target is the AB=CD completion from the top to the current sideways range, but it will probably offer plenty of shorter term opportunities to scale in and book partial profits along the way.
Good luck!
CADJPY: Short after leaving congestion zoneSimple trade setting up after a week's advance.
Entry under the weekly low and at 95.051.
Shout out to jangseohee and justatrader, who are already on this trade.
Good luck to us all!
USDJPY and Nikkei: Potential reversalWe have a nice short opportunity in these charts.
It's more evident in the case of USDJPY which offers a clear target and invalidation level.
In the case of the Nikkei, it's at the level of a long term resistance, and showing a painful advance, not something I'd consider bullish in my view, and to make things worse, the highest low has been taken out by a down bar.
We can enter short positions with confidence, keeping a reasonable stop, based on 3 ATR(11) in the case of the Nikkei, and slightly above my purple invalidation level in the case of USDJPY.
Target would be the horizontal line below initially, where I'd suggest covering half of the position and moving the stop loss to break even in case it continues to fall.
Nikkei: UpdateCorrection started, as expected.
We now have a bearish target in sight: 19184 by April 27th.
This level and date will be a potential retracement area, or reversal, depending on how price action evolves.
Considering the scale of the uptrend, I don't think this correction will end there, but we'll see.
Better expand as we move forward.
I am short GBPJPY, and monitoring SPX, EURJPY, AUDJPY and USDJPY for important clues about this large development.
Will post updates here.
USDJPY: UpdateSimilarly to GBPJPY, USDJPY seems to have topped after moving past the vix spike 75% retrace support level.
On the daily chart we can observe bearish rgmov signals and on the weekly we can see that price has gone under 123, and failed to produce new highs after testing a quarterly range expansion bar's 50% level.
It seems like this is the start of a strong bear market in this pair, so I'll be looking to go short on a retracement.
Invalidation/stop is a retrace past the 61.8 level of the first wave down, which I think will be over the weekly mode.
(I'm not positive is wave 1 down is finished, probably soon).
Again, going short here once we get the aforementioned retracment, is a very significant opportunity, which I don't intend in missing.
Good luck, and brace yourselves...wild ride coming.
Ivan.
FX CHART OF THE DAY: MEAN REVERTION UPWARDS PROBABLE USDJPYUSDJPY reentered 1st standard deviation from weekly (120-h) mean after a sharp drop earlier this week
In my previous chart I also mentioned that USDJPY held long term levels (see related)
Price is now likely to tag the weekly mean, as it moves into usual lateral range
USDJPY is also supported by BOJ, continuing its extensive monetary stimulus
Traders can take long positions close to the lower 1st standard deviation (118.70) targeting the mean (121.00) - with stop below recent lows (118.20)
USDJPY: No brainer buyUSDJPY testing the vixfix spike support, where smart money drove price up after a panic drop.
Rgmov is in an uptrend, this might be a large rally!
Buying here, stop at the downtrend signal target, matches 1 atr nicely.
Props to Nick Coulby for showing me the setup.
Good luck!
Abeconomics Continues to Fail – EURJPY ImplicationsThe proof is in the pudding, well it is in the globalized failing of quantitative easing.
Abeconomics is no different. Japan Prime Minister Shinzo Abe will continue to feel pressure as his "three arrows" economic policy fails to push consistent economic expansion.
Japan's economy shrank 1.6 percent on an annualized basis with falling exports and contracting consumer spending to blame. The calls for additional stimulus can be heard loud and clear, but the Bank of Japan (BoJ) will further risk market fragmentation if additional easing is lumped into the already giant program.
According to the continuous contract of Japanese yen futures, Japan's currency has declined over 33 percent since 2011. This has not garnered the growth Wall Street expected it to outside of asset prices. As the BoJ erodes the purchasing power of the yen, import prices are increasing and it is stifling consumer spending. Tax increases are almost a no-go for the same reason.
Since Abe was elected in 2012, Japan has only been able to grow by two percent. That's only a few tenths lower that the U.S. during it's quasi-monetary policy, now in its seventh year.
Near-term outlook for EURJPY:
The EURJPY has been rejected from resistance at 138.79 twice before its current retracement lower. Price action is hinging on support of 137.75, and a close below will signal further downside.
Dynamic resistance can be found at 137.55 and 13.30, or the 50 and 72-EMA respectively. Price action support won't be seen until 136.93, which corresponds to the near-term uptrend line. A challenge of 136 is probable.
If traders look to take the pair higher, a break of 138.79 could cause a momentum push higher after challenging the descending trend line. This could push the pair up to 139.90.
In the longer-term:
However, the BoJ could begin to talk the yen lower whether due to poor economic data or the fact that China's decision to devalue the yuan has implications throughout the region. A weaker yuan could force the Japanese central bank to weaken the yen further to try and gain an additional competitive advantage.
The People's Bank of China (PBoC) will look to shake the yuan's tether to the U.S. dollar, and future devaluations are in the cards. The BoJ could go tit-for-currency-war-tat.
Please follow me on Twitter @Lemieux_26
Check my posts out at:
bullion.directory
www.investing.com
www.teachingcurrencytrading.com
oilpro.com
GBPJPY: Top projection and long entry todayAnalysis on chart, this is an update to my previous GBPJPY time at mode weekly chart.
Interesting level to go long if offered with a fill.
Entering with 0.5% and letting it ride.
This might form a significant topping patten, as labeled on chart...highly remarkable top if it does (which would match a deep retracement in the S&P500).
Good luck,
Ivan.
Chart of The Day: USDJPY (7/22/15)The dollar-yen has been able to recover a sizable portion of yesterday’s ensanguine price action, following the dollar’s rejection from key technical resistance. Support for USDJPY remains clear with the Federal Reserve’s promise to hike rates, supposedly, sometime this year.
With the Fed keeping traders guessing, the dollar remains in an upward trend as the potential for monetary tightening stokes demand.
There also is the utter commodity smack down that is flashing signals of globalized deflation. Although, this underlying macro theme has been present for a while now. Gold is undergoing the largest rout is nearly 20 years, and West Texas Intermediate (WTI) crude fell back below $50 per barrel.
The 4H chart for USDJPY shows strong follow through after breaking through a descending wedge (shown by the major descending resistance trend line and descending support).
However, price action is beginning to chop as the pair snags 124 yen per dollar once again. The intraday chart suggests that dollar-yen will likely grind higher through the ascending channel.
Nevertheless, traders should be weary. The ADX, or trend strength indicator, is showing that the current trend strength is easing a bit. If USDJPY fails to close above 124.14, the pair could retest price support at 123.75; and this would also cause a retest of channel support just slightly lower.
A close above near-term resistance, USDJPY would have upside resistance targets of 124.50 and 124.70. If the pair broke down, ultimately closing below channel support, support will be sought at 123.47 (coincides with the 72 EMA) and 123.18.
Note: The one thing that can upend the dollar is ongoing softness in U.S. economic data that will derail the presumption of a Fed funds rate hike. The geopolitical and global macro climate will likely make yen attractive longer-term, loosing over 60 percent against the dollar since 2012.
Feel free to follow me @lemieux_26
Original Post: teachingcurrencytrading.com
GBPJPY: Long for now but watch it around September 28thTime at mode weekly analysis of the advance since the low in 2012.
Price has already tested once the most frequent price since 1991, and fell instantly, but now rebounded and is heading up again.
There is an active monthly uptrend, but the price target has already been exceeded.
It would seem as if this is a topping formation, and even if temporary, the decline that will unfold if this validates a terminal wedge, will be very sharp and at least headed to 171.067 instantly.
I'm long GBPUSD, and GBPNZD, but going long here might pay off, keeping in mind we might be able to short it soon.
I'll update the chart with my entry, for now, you can try going long at 188.6145 with a stop at 186.463 and no TP.
Cheers,
Ivan.
CADJPY: Potential long setup tonightThis pair is flashing an inminent buy signal.
If you look closely, the 1h chart shows an incipient uptrend, moving in impulsive fashion, and 4h and daily show price found support at a previous range expansion zone.
I'll be looking to go long on a retracement to 100.035 with a stop under the recent low, target is the weekly uptrend's target.
Good luck,
Ivan.
Looking At Ashraf Laidi's 40-Month CycleYesterday, Ashraf Laidi put out an interesting post on the USDJPY and a 40-month cycle.
From April 1995 to August 1998, the pair rose just over 85 percent. In brief, in the mid-90s, the US were raising interest rates (who does that anymore? Psh), which made the dollar stronger following the recession of 1990.
The Japanese yen was devalued, too, as their asset bubble grew bigger. The Japanese saw this as the cause of the "lost decade," while it could also have been blow back from the Plaza Accord in 1985.
Nevertheless, the pair ultimately crashed 31 percent from it's 40-month cycle high. Following the Asian Financial Crisis in 1997, the Federal Reserve began lowering rates in 1998, briefly increased the Fed funds rate before rapidly lowering rates into the 2000 bubble bust and recession. (Which I believe will happen next).
Fast forward to the current 40-month cycle, spanning February 2012 and June 2015. The pair has been able to gain a respectable 65 percent, and there is no reason why one would not BFTD; but, is the pair's fate remain the same as it were in the mid-1990s?
Analysts take of a policy devergence, but really it's come to a rhetoric divergence. The Fed has yet to tighten monetary policy, and even if it does, Fed officials have opined that it would still be "accommodating" and largely based on market reaction.
We very well could see a 25-50 bps increase in the Fed funds rate over the course of several months or a year, but that is when the true economic rot will fester to the surface; and the Fed will undoubtedly reverse course.
The BoJ has admitted, no matter how many times Kuroda tries to revert course, that there are diminishing returns in regards to a weak yen.
Quasi-monetary policy can only take economic growth to a certain point before fiscal policy takes the reigns, and we have not seen that from either country.
Both central banks have embarked on massive QE programs; yet nobody wonders why in the same period the US is undergoing its slowest recovery from a recession, while Japan has had three recessions since the financial crisis. During the 40-month expansion, Japan has had three quarters of GDP growth matched with three of economic contraction.
Central banks don't see to want to believe they are responsible for asset bubble, yet they are always the root cause.
Dollar On Shaky GroundDollar bulls may be few and far between, as a potential rate hike has now become a "buy the anticipation, sell the rumor" play. Even the most hardcore bulls like Marc Chandler has taken a step back to rethink the dollar.
After making a series of lower highs and lower lows, the dollar could very well test the lows near 93; while a series of resistance levels could snag any upside potential.
Last night, a few BoJ officials wanted to move the markets with their words. For some unknown reason, BoJ Governor Kuroda blurted out that the yen was "very weak" as to lead the market to believing it was too weak.
This is interesting on a few fronts:
One, a weaker yen was modus operandi numero uno. It was not "very weak" when it was down 25, 30 or 35 percent, but that 40 percent mark is the sweet spot.
Two, this comes at a very interesting point, following the G7 meetings. The market expects the Fed to increase rates solely based on non-farm payrolls and nothing else because, frankly, the data out of the US is borderline, if not outright, recessionary.
The Fed will never hike rates into a stronger dollar. As I said many of times, the Fed will work its way into the currency war by taking down the dollar. But much like their gold charade, the Fed has someone else do their dirty work.
The dollar is typically inverse of the yen, and by increasing the yen the dollar is almost guaranteed to fall by default. A falling dollar - in theory - supports the Fed's inflation projections.
It also gives the Fed more breathing room to throw around the idea of a rate hike.
Please visit my linked idea on the dollar. It is trading very much between S/R, while maintaining the downward trajectory.
Still projecting the DXY with an 80-handle by mid-summer.
USDJPY: Top spottedSimple setup, initiate a short when the support is breached.
We have a very strong decline after completing what looks like an expanding ending diagonal triangle in the 4h/daily charts.
If price moves below the support level outlined in the chart, it will accelerate down, probably moving 430+ pips to the downside.
As a bonus, crude oil seems to be moving up, while Nikkei falls, effectively boosting this trade, correlation wise.
Will update with my entry and scale ins.
Good luck,
Ivan.
EURJPY: Aiming for 147Analysis on chart, this is an update to my previous 4h chart.
I'm long and will be adding on retracements until we hit the target.
My stop is under 133.
Good luck,
Ivan.
EURJPY: Neutral but potentially a nice long tradeSimilarly to EURNZD and EURAUD, EURJPY exhibits some bullish characteristics.
I won't waste time with a huge writeup, the analysis is on the chart.
Feel free to comment, and if you agree, hit like ;)
Good luck,
Ivan.
CADJPY: Neutral, probably pending upside to be seenCADJPY has been in a consolidation for some time, before launching a fierce uptrend, in what I consider to be a wave C impulse in a larger flat.
I considered the move complete, but looking at how it behaved after topping, I suspect that the uptrend isn't complete yet.
We can observe a series of smaller timeframe trends briefly putting the bears and the bulls in command, typical triangle behavior.
Also, the daily and weekly rgmov remain signaling an uptrend, while price stopped falling when meeting with the lowest high trendline I drew from the lows, and we have a series of highs and lows where we don't observe a move past them, effectively suggesting coiling price action, yet to explode.
The explosion will most likely be up if this is indeed a wave 4 triangle, but we'll see.
For the time being, I refrain to trade this pair until it shows directional commitment on either side.
Tread carefully!
Cheers,
Ivan.
EURJPY: BOJ fueled short pt. 2We have interesting news releases coming out tonight, and thoughout tomorrow's session.
The technical chart shows an uptrend that is showing signs of exhaustion after correcting the strong decline from the December high from March 16 onwards.
The advance was halted when price reached an area of weekly low volume resistance, where the market was extremely one sided. These areas can reject price and stop the bulls' advance very reliably.
Now the market remains motionless after a strong selloff, which confirmed an hourly downtrend signal, while the 4h chart shows a volume buildup on the lows, increasing selling pressure after the sharp leg down completion started a sideways correction. I expect to see a strong move coming out of this juncture, fueled by the news releases.
23:00 US USD FOMC Member Williams speech 1
FRIDAY, MAY 22
02:00 CN CNY CB Leading Economic Index (Apr) 1 0.2
n/a JP JPY BoJ Monetary Policy Statement 3
03:00 JP JPY BoJ Press Conference 3
06:00 DE EUR Gross Domestic Product w.d.a (YoY) (Q1) 2 1.1%
06:00 DE EUR Gross Domestic Product s.a (QoQ) (Q1) 3 0.3% 0.3%
06:00 DE EUR Gross Domestic Product n.s.a (YoY) (Q1) 2 1.1%
06:45 FR EUR Business Climate (May) 1 101 101
08:00 DE EUR IFO - Expectations (May) 2 103.1 103.5
08:00 DE EUR IFO - Current Assessment (May) 2 113.6 113.9
08:00 DE EUR IFO - Business Climate (May) 2 108.3 108.6
08:00 IT EUR Industrial Sales s.a. (MoM) (Mar) 1 0.4%
08:00 IT EUR Industrial Orders s.a (MoM) (Mar) 1 0.8%
08:00 IT EUR Industrial Sales n.s.a. (YoY) (Mar) 1 -0.9%
08:00 IT EUR Industrial Orders n.s.a (YoY) (Mar) 1 2%
08:00 EMU EUR ECB President Draghi's Speech 3
09:00 IT EUR Retail Sales n.s.a (YoY) (Mar) 1 0.1%
09:00 IT EUR Retail Sales s.a. (MoM) (Mar) 1 0.2% -0.2%
n/a GR EUR Current Account (YoY) (Mar) 1 €-0.929B
12:30 US USD Consumer Price Index Core s.a (Apr) 1 240.79
12:30 US USD Consumer Price Index (MoM) (Apr) 2 0.1% 0.2%
12:30 US USD Consumer Price Index n.s.a (MoM) (Apr) 1 236.71 236.12
12:30 US USD Consumer Price Index Ex Food & Energy (MoM) (Apr) 2 0.2% 0.2%
12:30 US USD Consumer Price Index (YoY) (Apr) 3 -0.1% -0.1%
12:30 US USD Consumer Price Index Ex Food & Energy (YoY) (Apr) 3 1.7% 1.8%
13:30 JP JPY Bank of Japan Governor Kuroda Speech 3
13:30 EMU EUR ECB President Draghi's Speech 3
19:00 AR ARS Trade Balance (MoM) (Apr) 1
Previous ideas:
