USDJPY - where to but indecision and price - a key turn point perhaps..

[Guest Philstrading]

USDJPY is currently at a key turning point on the daily overshadowed for an entry point by USD 3* news and FOMC statement today,,, I like this level but news could push it both ways and technicals are as I see them somewhat indecisive due to the cycle and levels. After today I'll either be bullish or bearish but will be sitting it out until after news and price has made up its mind... 

 

Daily entry would be above the 11147 level which could be rejection of course... usd news and fomc announcements a bit off putting... I like the level but not the cycle or the news.. there is also a similar pattern on the daily where there was some indecision and a move higher before a sharp drop, I'm noting the momentum pattern here too... I'm sitting out due to multiple usd news but I will look for bullish entries if price moves unless below 11067 ish, and then look to the 10,500 level based on the weekly.

 

  

[Mercury]

Thanks  I like the thinking.  The only problem with sitting out I see is getting left behind on a quick move.  There is also BoJ tomorrow on this cross so lots happening BUT this is usually when a big move starts.  Setting stop in orders to cover both scenarios might be a way to go, unless you are going to do this manually once you see the moves.  The risks are getting stopped in on volatility and then hit via a reversal but if protective stops are set well then downside is minimised and hopefully 1 option sticks, it is unusual to get a 3 way reversal in volatility.  I will be watching as we come up to FOMC and considering where to set stop ins closer to the time but for now a long above 11160 and a short below 11060 seem favourite.  I leaning towards a rally based on bigger picture assessment.

[Guest Philstrading]

Thanks Mercury.... Well I was in a bullish trade on usdjpy and risk free with 2 partial profits taken and a partial running with a positive stop.... partial stop had slippage of 24 points but was bearable due to its size... 

 

JPY news last night somewhat volatile, but I don't trade based on possible volitility related to news due to putting you into a losing trade and just coming back to its original price normally.... you can make snap profits of course, but I'm not a news trader where high volatility is expected, I will rather go down to ticks and look for the trend and make a ltick chart entry or lower timeframe entry- you might have to go to 100 ticks or so but if spread is OK then perfectly feasible to trade the sharp moves if they are continuing... usdjpy last night would have been good to trade at 100 ticks... I was snoozing here in the UK of course... I'm now looking bearish based on the weekly towards 10,500 but will see what support it pulls back to after the volatility....

[donaldprice]

FT this morning

The yen surged 2 per cent and equities slumped after the Bank of Japan dashed market hopes of stimulus, despite data showing the country had fallen back into deflation for the first time since 2013.

Banishing deflation, which has dogged Japan’s economy for the best part of two decades, is a key plank of the Abenomics growth programme of Prime Minister Shinzo Abe. But the central bank’s pursuit of a weak yen has been stymied in recent months, prompting expectations of more monetary easing at Thursday’s meeting.

Instead, BoJ governor Haruhiko Kuroda’s decision to stand pat shows he is betting that Japanese business confidence will hold up, stronger yen notwithstanding, and a recovering US economy will come to his rescue.

 

He may have been influenced by a neutral overnight statement from the US FED RESERVE, holding open the possibility of a US rate rise in June. Tightening US monetary policy would reduce upward pressure on the yen.

Futures on the broad Topix stock index were trading down 42 points at 1,339. The yen surged 2 per cent to Y109.3 against the dollar.

Roughly half of market analysts had expected a change at this meeting although they were split on whether Mr Kuroda might cut interest rates again, increase the pace of BoJ asset purchases from Y80tn a year, or buy more equities.

In the event, Mr Kuroda’s only change was a minor subsidy to earthquake-hit banks on the southern island of Kyushu, providing them with zero-interest loans and exempting more of their balances from negative interest rates.

With funds already pouring into Kyushu for reconstruction, local banks have seen a rise in deposits, forcing them to bear a greater burden of negative rates. The changes offset that.

Meanwhile, the BoJ slashed its economic forecasts. It cut its growth forecast for the fiscal year to March 2017 from 1.5 per cent to 1.2 per cent, and its forecast for inflation excluding fresh food to 0.5 per cent from 0.8 per cent.

In a signal that more monetary easing remains possible, the BoJ said risks to economic activity were “skewed to the downside”

The BoJ said it stood ready to “take additional easing measures in terms of three dimensions — quantity, quality and interest rate — if it was judged necessary for achieving the price stability target”.

But following January’s shock move to negative interest rates of minus 0.1 per cent, it shows the BoJ’s reluctance to make small adjustments to policy, rather than big, high-impact changes.

Earlier in the day, data showed the headline consumer price index down 0.1 per cent on a year ago, compared with analyst expectations of no change, as slumping global commodity prices and a stronger yen weigh on Mr Kuroda’s effort to drive inflation to 2 per cent. 

But while prices continue to stagnate, there was better news from Japan’s labour market, with the unemployment rate down from 3.3 per cent to 3.2 per cent and the ratio of job openings to applicants up 0.02 points to a new 25-year high of 1.3 times.

The yen has risen from about Y120 against the dollar this year, despite a shock BoJ move to interest rates of minus 0.1 per cent in January, hurting Japanese exporters and setting back the central bank’s effort to escape from two decades of on-and-off deflation.



[Guest Philstrading]

Thanks for that donaldprice... 

I'm noting the S/R levels and will be watching to see where price trends to, looking toward intraday  here until a setup shows itself...



 

[Mercury]

Is that a double bottom or maybe just a very wild A-B?  If the latter then the wave C is still on.  A small risk at this point with stops below 11 Apr low has to be worth a punt no?

 



[Guest]

COULD WE SEE A TURNING POINT IN USD JPY

A lot of short-selling last week of USD-JPY pair, no doubt some may have been shocked at BOJ decision others no doubt probably where sniffing out the possibility of this heading lower. However new week, therefore fresh ideas. On the daily chart we have hit an interesting support last not seen since october 2015.

[Mercury]

I agree  we could be on for a rally soon.  My tramlines look slightly different I think but it all tells the same story: oversold over reaction to BoJ doing nothing (nothing!) and if the USD basket starts the move we have all been tracking for a while now then we could see turns in GBP, EUR, JPY and CAD to go with the one we have on AUS (not part of the basket).

 

Although USDJPY looks like a retrace rally to me rather than a motive wave (long term trend) it could still be worth 1000 points so well worth the risk reward to go Long just now I feel.  Might get one more leg down or a 1-2 pullback still to come.

 



 

 

[donaldprice]

Hy Mercury, good to hear your insight on this. I am not going to speculate on what the BOJ might do at these levels, although this is no doubt taking a toll on its exports, but as long as we dont break that daily support i think we could see a nice rally, hopefully we dont end up with 5 waves and then turn down again.

[donaldprice]

Hy Mercury, good to hear your insight on this. I am not going to speculate on what the BOJ might do at these levels, although this is no doubt taking a toll on its exports, but as long as we dont break that daily support i think we could see a nice rally, hopefully we dont end up with 5 waves and then turn down again.

PLEASE IGNORE DUPPLICATION, SOMETHING WENT WRONG ON THE TRADING DISCUSSION ROOM

[Mercury]

Ya pays yer money ya takes yer choice and set your stops at a level you can bear.  If you get stopped out but it doesn't change your view (i.e. just another leg down) then try again.  Alternatively wait for the bounce and retrace in EW1-2.

[donaldprice]

Possible scenario. USD, JPY. We are just approaching 61% fib level from W3, now in W4. Could possibly see a retrace from here, smacked the tram line, and therefore could now see formation of W IV of W4.

[Mercury]

Also agree with you on this one  and makes sense if GBP/EUR/CAD and DX are also retracing.  Bigger picture assessment, which we discussed previously, suggests this is all part of a bigger W1 (or A admittedly) so I'd expect a bigger retrace after this move, which could therefore be more shallow.  Not one to trade in my view unless you want a quick short term swing.  Better to wait for the end of W1 (maybe the W4-5 if the coming retrace is decent) and subsequent retrace then try to get on the Wave 3 (or C!).

[donaldprice]

True, True, i suspect that will retrace to 50% area possibly and then contemplate joining the final wave.