USD/JPY

[FiringSquad13]

Been watching this pair for a while.  The hourly shows a bit of support around 12300.  A move upwards could see 12340.  One to watch if it breaks the support.

 

(Hourly chart)

 

[Guest Zero]

Looks like someone was holding it up for some options??

[jbtrader]

I am expecting the BOJ to increase its easing measures in the very near future.

Their reluctance to move at the last couple of meetigs has seen 1.25 as a cap.

As I have said previously I believe there is much more upside here for years to come. (EUR is in the same boat)

[donaldprice]

Although their are many arguments for both strengthening and weakening of the YEN, my stance in the longer time frame is that unless we break below the 38% retracement on a monthly time frame, we will see further weakening of this currency, and here is why. The yen has been strengthening now for many, many years, right up until 2011. Since then, of course until 2015 has been advancing heavily and broke the monthly timeframe.

[Mercury]

My take on USDJPY is fairly simple, the market is in a retrace prior to USD going on a charge (or Yen falling through the floor) but when?

 

The Monthly chart is highly instructive, albeit incomplete in terms of data prior to 1978.  Despite this the tramlines are good and early 2013 saw a break of the upper tram to the Fib 23% and now we are in retrace, which I am currently reading as a Wave 1-2 (could be A-B) retrace.

 

The Weekly sheds a bit more light on this retrace where you can see a clear 1-5 motive wave (which could be up to a Wave A rather than 1 but for now same thing.  Neg Mom Div on the Wave1rA high in 2015 drove us into the current bearish move but rather than a full bear this seems like just a counter trend move to me.  With Pos Mom Div building and Fib 50% at 10,000ish (coinciding with some strong past congestion at the halfway point of the previous rally I am targeting that area for the turn back to bullish move and it could be a big one regardless of whether it is a Wave 3 or C.

 

The Daily zooms in on the current move down and it could read like a 1-5 but I currently prefer the A-B-C setup,  Either way the 10,000 area seems like a good termination point for this move down.  4 hourly and hourly corroborate and short term I'm looking for a retrace back up to about the 10,800 area, which would provide a nice Short entry worth about 800 points but if that doesn't happen the 10,000 Long is the bigger play.  Patience is needed on this one.

 



[Mercury]

PS  I can't agree your point about not predicting and just following.  Probably makes sense if you day trade but swing traders must analyse to predict market moves and continuously update to ensure the market is staying on track with the forecast.  Following a trend is fine but identifying the turning points is vital for entry and exit, also for minimal risk for max reward opportunities.  Everything else you said I agree with.

[Mercury]

Yes of course  but you have to predict those scenarios with analytics and have your strategy mapped out to respond to the market as it unfolds.  Maybe I misunderstood your point as meaning don't analyse scenarios in advance just respond to what you see rather than analyse and prepare then act when you see, the latter of which I would agree.

[Mercury]

Anywhere between 10,000 & 10,200 I think.  Gotta take recent congestion zone more seriously right?  Especially as it coincides with a Fib 50% line.

 



[donaldprice]

Their has been much heavy talk in the financial markets related to this currency pair and without doubt the BOJ have been knocking on wood over this. It was quite interesting to hear different views on what the BOJ could do, however it appears that everyone seems to be drawing the same conclusion that their is very little Japan can do. Negative interest rates have been already unpopular (surprise surprise?! lol) for the people of Japan and major banks have also expressed clear distaste for it and with upcoming elections in japan, without any mention of the BOJ I do think it would be fair to say that much more short-selling is to come for this unlucky currency pair. It would make sence for a currency intervention during times where their is plenty of opportunity to secure your money in a very investor friendly environment. But since right now, not even government bonds are desirable, you can see that both Gold and YEN are places to place your money, hence any intervention will be very, very short-lived.

From a technical view the 100 level is now clearly in sight, which will lead to the 50% fib level, however why stop their,  94 is also the 61% level of which this is where we could see a very likely intervention.  Therefore any relief rally should no doubt be seen as an opportunity to sell into.

[Mercury]

Away for all things UK/EU I find myself wondering if this pair has actually hit the bottom of the recent move down.  It has hit the 10200 we have been discussing recently and rebounded away back up but this coincided with the Brexit vote and there is a case for a further leg down before the next rally begins.  It actually went beyond 10000, which could be indicative of a further drop.

 

My analysis shows that a further fall to the area of  9600, with thee Weekly chart Fib 62% at 9500.  There is a lack of Pos Mom Div to accompany a major turn up and Monthly RSI has not yet hit oversold (not a material indicator on this time frame but it is historically usual for this to happen so...).  From a fundamentals point of view the Yen has been an option for safety of late and only when the case for the USD become overwhelming is this likely to change plus as some point the markets will realise that AbeEconomics is not working, just like all the other central bank/politico schemes are not working.

 



 

 

[Mercury]

Could be and I would be very cautions about a tactical Short on this market, we should be looking for the right Long entry in my view.  However I cannot rule out another leg down on a technical analysis basis and in fact it seems to be quite a strong likelihood.  Unless or until there is a peak above 10,700 I can't see a confirmed turn.  Another leg down and then turn would mark the bottom for me.

 

Time will tell, one to watch patiently as there is plenty of upside.

[Mercury]

Been a while since anyone posted on USDJPY, is anyone still trading it?

 

Strong rally recently might suggest that the Brexit low was the low but I remain unsure on this one.  There is a nice fit with a further leg down to the 9600 congestion zone where there is support from multiple timeframes and angles.  The EW count fits an A-B-C up to the recent turn down, which comes at the Fib 76.4% from the Brexit top to bottom plus Stochastic has just touched overbought in the Daily (a classic marker for a retrace in my experience if it now bounced back down sharply).  A break to the upside almost certainly confirms the Brexit low as THE low and a break above Brexit Top makes that 100% turned into a bull rally for me but just now a Short at the Fib 76.4% was a decent bet, which I took and  am not at B/E protected.

 

Let's see what happens next but for me a run down to the 9600 level presents a great Long opportunity, as does a break above the 76.4% fib.

 

any thoughts anyone?

 

 

[donaldprice]

Hy Mercury, I do share your view that overall we have still yet to see this currency pair terminate around the 94 level. Currently I can see this pare reach the 108 level to complete W4 and then w5 could terminate around the 9400 level, however if we do see more serious economic uncertainty, then this could exceed this particular level.

[Mercury]

Good point  but am I misreading something, it looks like 1066 to me.  This is consistent with the underside of the previous wave (motive wave) Fib drawing, which can still be indicative of a congestion zone but not a retrace level.  The retrace fib should be drawn from the 18 Nov 2015 top and/or the 29 Jan 2016 top to the Brexit bottom.  The Fib 38% would give you your 10840.  However this breaks the strong down-sloping tramlines, not impossible but if this happens I'd be minded to consider the Brexit bottom as the bottom and a tramline break as a Long opportunity.  It could be that the current turn is just a Wave A (it is at the Fib 23%) but either way a Short here and quick stop move is a decent bet.  After that we will see how the next move down evolves and can determine whether we have caught a final move down or just a wave B.

 

For me the secret to successful trading is identifying these scenarios and the trading points with high likelihood of success and taking them with close stops and if they get reversed on try again at the next level (in this case the 1084 level you suggested).

[Mercury]

Hello to any early birds, so  JPY was just a small retrace after all, I was stopped out at B/E and then reversed on break of the recent high now targeting the next level for close of Long and taking another Short.

 

I have adjusted my Fib position start point to the top Wave 2 (Green) as we are currently looking at a wave 3 retrace and this creates a Junction with the down-sloping tramline at 10,775.  Prior to that there is that Weekly chart underside Fib 38% in the 10,660 region but so far I prefer the 10,775 zone.

 



[donaldprice]

Agreed Mercury, best wait fore that 108 tramline kiss, before entering a short position.

[Mercury]

A lot of markets are murky just now, stuck in sideways moves before deciding what they will do next.  It is hard trading without a decent motive direction and one thing I tend to start looking for in such circumstances is the so-called "ending triangle" formation.  This is indicative of a motive wave end and trend reversal.  It can happen at the end of a strong motive 1-5 wave or a wave C end of an A-B-C retrace.

 

I think I may have found one on USDJPY.  Remember that my long term bias is for this pair to rally strongly but I can't be sure the end of the previous wave is done (i.e. a fresh lower low is a possible, credible scenario).

 

Just now USDJPY looks like it is on a strong rally and this is what the BoJ wants.  They are waiting to see more data and moves before any further action.  When it comes that action is likely to drive the Yen down but maybe it strengthens before that action is taken?

 

Ont he 4 hourly chart you can see that the market is approaching the Brexit high (wave 4 of the previous wave down - a classic retrace point).  In addition this is the underside of the Fib 38% on the Weekly and at a strong resistance zone.  There is Neg Mom Div and a 1-5 wave C in play.  On the hourly you can see the possible ending triangle in pink with overlapping waves in 1-5 form.  Again that Neg Mom Div with Stochastic and RSI approaching over bought.

 

I can't rule out a run up to the Fib 38% off the long wave down high (10750-800 depending on where you draw it from) but any turn around 10660 mark is a decent Short opportunity.

 



[Mercury]

A hit right on 10750 and upper daily tramline.  I took a Short at the leading edge of the resistance zone and am now tracking a 1-5 down to a fresh low near the corresponding lower daily chart tramline.  If this all works then that should be the low for the bear move and we should get a strong rally on general USD strength and BoJ policy action to suppress the Yen.  This is a great one to swing but am protected at B/E against any alternative scenario emerging.

 



 

 

[Guest pratt123]

Hi . What do you think of EurUsd for a short now? Candle broken 20SMA on the 4H and Daily charts - signs of a reversal perhaps? 

 

Also ECB later today likely to be gloomy outlook, albeit with no change to rates.

[Caseynotes]

Interesting chatter re; USDJPY ...