USD / JPY

[SLT]

Elliottwave international are calling for usdjpy to head into a multi month decline.

If it does start, it will be a C wave drop! so do not attempt to buy it! if it starts to fall fast for periods of time.

Second chart shows a 1 shot 1 kill per week, in these set ups

 

[sqa]

The NFP spike was right up into the Weekly Order Block established in the previous NFP. There's a bunch of Orders stacked up there, again. The pair has shown no signs of running back to the Year Open.

The problem is the Jan 28-Feb Long-Term Low. They've sold down to it a few times (and we're in a COT Sell Program from January for at least a several months), but that level seems to have a huge amount of Institutional Resistance.

In fact, if we break 100, be very mindful of the BoJ getting involved. This isn't a pair I'd like to Position Trade for a while, unless the USDX takes off. But 1-2 Week swings are good trades. Plus, with the Dealer's Range concepts, it's a pretty solid Intra-Day pair. Fairly clean signals.

 

[SLT]

The NFP spike was right up into the Weekly Order Block established in the previous NFP. There's a bunch of Orders stacked up there, again. The pair has shown no signs of running back to the Year Open.

The problem is the Jan 28-Feb Long-Term Low. They've sold down to it a few times (and we're in a COT Sell Program from January for at least a several months), but that level seems to have a huge amount of Institutional Resistance.

In fact, if we break 100, be very mindful of the BoJ getting involved. This isn't a pair I'd like to Position Trade for a while, unless the USDX takes off. But 1-2 Week swings are good trades. Plus, with the Dealer's Range concepts, it's a pretty solid Intra-Day pair. Fairly clean signals.

Check out these Fib ranges to, for intraday, you want me to show you the run down via video? for the 0 - 1 points its pretty simple 8)

 

[AusDoc]

Elliottwave international are calling for usdjpy to head into a multi month decline.

Yeah, but Jim Martens and his team are always calling for stuff with great conviction that never happens. It's an EWI thing. It's their SOP.

As it happens, this time they may be right. A decline requires a strengthening Yen. Most people had come to believe that the current BOJ govenor, backed by a supportive PM, was going to successfully weaken the Yen to stimulate growth. For a while it seemed to be working but some of that effect was just the belief at work.

Now it looks like the observed BOJ solidarity is more cultural than real and the further Yen weakening the governor wants to bring in (in the form of increased money supply) may not get up. If it doesn't then many players are caught heading the wrong direction and when they switch the "wave C" drop could be impressive.

What I find interesting here is that the idea isn't dependent on significant USD change. It is more about the value of the Yen. Even if not a brilliantly strengthening Yen, a non-weakening one will achieve the same ends and will, of course, impact all the JPY pairs.

Interesting article here: http://www.bloomberg.com/news/2014-07-21/kuroda-struggles-to-transform-boj-mindset-as-rift-seen-on-board.html

 

[sqa]

It's more of an "eventually it will happen" deal with the Yen. The Commercials priced in a huge "Net Long" position (ComDol data is inverted) back at January's high and have been driving it down to the 101.00 region ever since. The BoJ is definitely defensive of the Lows, which actually makes the current "game" little funnier.

You can read the movements like this: They run it up, BoJ is happy. Banks acquire more positions at the top, then they slam it down & make money off the BoJ/other traders. It's especially noticeable when they do a repricing to catch a low at midnight JST. The pre-NFP Run up and post-NFP slam down has been practically the only good USD-JPY trades to take for the last few months.

Still, I wouldn't want to be holding a Long when it breaks. But like most other current financial assets that are "ready to burst", I get the feeling it'll take longer to happen than we imagine. Which is just the big boys driving out the smaller fish before the big move. >

 

[AusDoc]

The Commercials priced in a huge "Net Long" position (ComDol data is inverted) back at January's high and have been driving it down to the 101.00 region ever since.

I can't quite follow what this sentence means sqa. "The Commercials priced in a huge "Net Long" position." What does priced in mean here exactly?

The BoJ is definitely defensive of the Lows, which actually makes the current "game" little funnier.

Yes, it might seem odd, given that their intention is to weaken the Yen. You'd think they'd be happy with it low and heading lower. Trouble is CBs all work towards bands of acceptability over planned time periods. Basically, they try to manage their currencies like interest rates. I guess the lows must have been outside their band if they were defending the level.

You can read the movements like this: They run it up, BoJ is happy. Banks acquire more positions at the top, then they slam it down & make money off the BoJ/other traders.

Hmmm... who is "they" referring to? Off the lows may be fine, but why would BoJ be happy? They have been wanting a weaker currency. Which banks are you suggesting are being played like dumb money?

I get the feeling it'll take longer to happen than we imagine. Which is just the big boys driving out the smaller fish before the big move. >

Yep, I think you're right there.

 

[sqa]

Good point, I managed to use the COT Data chart & Spot Forex in the same sentence. Sorry about that. The High (in Spot) / Low (in COT Data) reads to me as locked in, except for something really "big" happening to one or the other side of the USD-JPY pair, from January's level.

I'm not certain who "they" are, but there's definitely two different "groups" that run the USD-JPY. With such low volatility (two days last month posted the lowest Ranges since the pair went unpegged in 1971), the movements of the major players actually are pretty clear.

And the big one is the roughly 2 week cycle the pair undergoes. In all but the heaviest of trending periods, they'll always pull the pair back 1 way or the other to move through a large set of trades. Given the huge USD -> JPY & JPY -> USD flows of quite a number of big companies, I imagine there's a way to get a rough idea of when each month they're likely to form relative high/lows within the current range. For a country that imports 99% of its crude oil, the actual Oil price movements have little effect on the currency. I have a hunch those Gasoline contracts have a strange "tendency" to render at relative "high" values for the Yen itself.

 

[AusDoc]

I think you may be able to get a job with the financial press sqa. )

This is interesting though:

(two days last month posted the lowest Ranges since the pair went unpegged in 1971)

That's amazingly low volatility. For one quantitative view, the Average weekly Range over the last 52 weeks is 158 and over the last 4 weeks is just 92. The Average Daily Range over the last 240 days is 67 and over the last 5 days is just 31. Shh.. type softly, we might wake it.

 

[sqa]

I'd never want to take that low of pay. 8) Though my media experience is in the production side. At one point, I was a professional level designer. Life & God, however, had different ideas.

I think it was last Wednesday, on a GMT 5-day ADR, that it posted a 24. And it didn't actually hit ADR. (Ended up being a consolidation into a drop down during Tokyo)

I read the stat in passing from one of the financial websites, but seeing as I'm learning to trade the pair and lived through it, I'd believe it. (Obviously, depends on the chart you use, but something like June 23rd comes in at a 14.3 pips on a EDT chart) I haven't found any non-Sundays with as little movement in anywhere in the recent past, but I haven't run a historical chart study to verify it.

Though it's been a blessing in disguise. It's rapidly increased my skill as a trader. Mostly because it'll run to the good entry levels at any time of the day.

 

[SLT]

One for Sqa! delivered from the land down under, by the way "Men at work" was the first band i ever went to. :tunes:

 

[AusDoc]

At one point, I was a professional level designer.

You designed levels for a living! Wow, now you're using them for a living.

 

[sqa]

You designed levels for a living! Wow, now you're using them for a living.

Unfortunately, my Quake 2 maps weren't that good. ;D

Thanks, GdayFX. I'm sitting in that trade right now. I managed to ride the previous spike up for 1/2 my position (It returned back and hit my "just barely positive stop", as I'm waiting for the day the pair drops out of bed.) Wish I had gotten in better, but I was a bit too tired to notice the Reflection pattern setup when it happened last Thursday.

We've got NFP up on August 1, so the run up either starts this week or next week. Considering what they did last week, we might actually see a run towards some "unfulfilled ranges" still sitting on the Daily Chart.

Edit: And that Monthly Resistance line you have there. Is it the Month Open? Because that's where it's sitting just above at the moment.

 

[SLT]

Update, price reacts to Monthly high nicely

 

[AusDoc]

"nicely"? I like more precise PA to label it a reaction. That SR line looks a tad low - next you'll be calling it a zone! )

Of course an H2 close with a candle body fully above the line does make it both support and resistance. That's handy

Given the recent Yen strength it's just as well the "vulnerable" zone is so long. I think the JPY has surprised some.

 

[SLT]

There you go tiger...

 

[sqa]

There's kind of a weird situation where I closed that long after the News on Tuesday. This isn't a pair acting much like it's in a hurry to go up. Or down.

So I've been Short since right after the pull back on the US CPI. Took 3/4 of it in profit yesterday, and just have a 1/4 left on. There's also this funny detail where there was 4 nested OTEs where I took the trade. Fibs for days.

Though with the utter love the pair is making to the Range between 101.45 & 101.55, I'm really unsure. That's why I took profit on 3/4 of the position yesterday, haha. Bad situation to sit with much risk on this pair at the moment. Tuesday's news run up cleared a logical stop level than ran off that hard. That doesn't speak great Bull Run to me. Though the Yen Flag from yesterday isn't a trend or reversal sign either direction, just a sign of a Asia to LO move.

 

[sqa]

There you go tiger...

LOL.

I got in at 101.53 and the first part out at 101.35 yesterday. I even caught a 70.5 OTE on the 5 minute chart while doing it.

 

[SLT]

A bit of Elliotwave just for kicks

 

[sqa]

Have I made the joke the pair is currently the "Swing-Scalp" pair? Where Scalping plays can take 2 days to happen?

 

[AusDoc]

A bit of Elliotwave just for kicks

Just as well it's just for kicks Dan, because it can't be an Elliott wave count shown like that. You have indicated waves of the same degree, ie (i) to (v), with a 5 count in both directions. You naughty boy! )