Tag : USDJPY

USD/JPY Classic

Posted by Mulder Venture at 3:22 am

The measured move objective off of the double top triggered on the break below neckline support at 91.25 has now been reached and although the overall trend appears to be grossly bearish at present, shorter-term technicals are starting to look a little stretched and could potentially be warning of an upside reversal over the coming sessions.

USD/JPY: The measured move objective off of the double top triggered on the break below neckline support at 91.25 has now been reached and although the overall trend appears to be grossly bearish at present, shorter-term technicals are starting to look a little stretched and could potentially be warning of an upside reversal over the coming sessions. At present, we see the risk for a break below 89.00 and into the 88.00’s. However, any setbacks beyond 88.25 are seen limited with the level coinciding with the 61.8% fib retracement off of the November-January move. Setbacks were also very well supported in the 88.00 area back in the Fall of 2009 and as such, we will look to take advantage of a dip into the lower 88’s to establish a fresh long position. STRATEGY: BUY @88.30 FOR AN OPEN OBJECTIVE; STOP 87.30. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON WEDNESDAY. 3X LEVERAGED.

USD/JPY Setting Up for Buy on Dip Below 89.00

Posted by Mulder Venture at 3:51 am

The Yen, Sterling and Australian Dollar have been the standout currencies on the day thus far, with price action in these currencies being driven by some obvious fundamentals.

FUNDYS
The Yen, Sterling and Australian Dollar have been the standout currencies on the day thus far, with price action in these currencies being driven by some obvious fundamentals. For the Yen, the rally has been all geopolitical with the news that North Korea has fired into the no sail zone waters by South Korea attributed to the safe haven Yen buying. In the UK, Sterling has found some fresh bids on some rather upbeat comments out from BOE Sentance. Meanwhile in Australia, the firmer than expected inflation data has once again generated some fresh buying in the antipodean, which is the second best performer on the day. Nevertheless, gains have been capped somewhat after Australian Treasurer Swan downplayed the CPI result and said that inflation was expected to remain low for some time.

Relative Performance Versus USD on Wednesday (As of 10:00GMT) –

1)    YEN               +0.29%
2)    STERLING    +0.27%
3)    AUSSIE         -0.03%
4)    SWISSIE       -0.04%
5)    EURO            -0.10%
6)    CAD               -0.23%
7)    KIWI              -0.25%

Elsewhere, the Euro trades somewhere in the middle of the pack on Wednesday, but has found some sell interest on the back of comments from Dr. Doom Roubini who says that he’s never been more pessimistic over the EMU than he is at present. Also seen weighing on the Euro are comments from EU Juncker who expresses dissatisfaction over the imbalances created by an overvalued Euro and undervalued USD and Yuan. ECB Weber has managed to balance things out a bit after predicting that Eurozone growth in 2010 will be better. Weber does however concede that the crisis is probably not over. Finally, ECB Trichet has offered his support for Obama’s plan to control the banks, but also says that proposals should be coordinated globally. UK CBI distributive trades was not yet released at time of print.

Looking ahead, US mortgage applications are due at 12:00GMT, followed by the more market moving new home sales (374k expected) at 15:00GMT. Things then quiet down for a couple of hours until the highly anticipated afternoon event risk in the form of the FOMC rate decision. While it is widely anticipated that the Fed will leave rates unchanged at 0.25%, the focus will be on any modifications to the accompanying statement that provide hints as to the direction of monetary policy over the medium-term. US equity futures are marginally offered, while oil trades flat and gold is lower.
GRAPHIC REWIND

TECHS
EUR/USD After breaking down through a multi-day consolidation below the 200-Day SMA to signal a material shift in the structure and expose a measured move objective by 1.3800 further down, the pair has been in the process of a fresh bout of consolidation between 1.4030 and 1.4190. We anticipate that the consolidation will soon be broken to the downside, with a break below 1.4030 and close below 1.4000 seen accelerating declines to 1.3800. Only back above 1.4200 delays outlook and gives reason for pause.

USD/JPY (See below)

GBP/USD Gains have stalled out by 1.6455, with the market looking like it is now ready for bear trend resumption after the formation of a bearish daily gravestone doji-like candle in the previous week. Key short-term support comes in by 1.6085 and we will look for a break below this level to reaffirm our bearish outlook and accelerate declines back towards critical medium-term support by 1.5700 over the coming days. For now, any intraday rallies should be well capped ahead of 1.6370.

USD/CHF The market is in the process of carving out a major base since dipping down below parity in November 2009. Look for a higher low by 1.0130, to be confirmed on a break back above 1.0500 over the coming sessions. Above 1.0500 will then open a fresh upside extension back towards next key resistance in the 1.0700 area. Only back under 1.0130 would delay outlook and give reason for pause. Bulls should look for opportunities to buy on dips into the 1.0250-1.0300 area.

FLOWS
Funds and importers on the bid in Usd/Cad; US prime name on the offer. US prime name and some private clients selling Nzd/Usd aggressively. UK clearer selling Gbp/Usd. Leveraged accounts and macro funds building short Eur/Usd positions.

Market Awaits BoJ, FOMC and RBNZ Decisions

Posted by Mulder Venture at 12:00 am

Currency markets are consolidating at the beginning of this week after the turmoil of Obama’s banking overhaul proposals.
A sparse data calendar on Friday combined with very few releases today means that most traders are likely to remain on the sidelines until further details of the Volcker rules are announced, or until market attention is drawn back to fundamental data. Along with a number of economic releases of note in the coming sessions, there are three central bank meetings scheduled in the G10.

The first will be the BoJ rate announcement tomorrow where markets are expecting rates will be kept on hold at 0.10%; however there is mounting speculation that policy makers are considering expanding an emergency loan programme, and increasing their purchases of government debt. If true, we feel this would further undermine the JPY currency in the medium term; but in the short term the JPY is currently benefitting from a wave of risk aversion post-Obama – with USDJPY dipping as low as 89.79 on Friday. What will be interesting is if the BoJ choose to make any comment on this recent strengthening in the currency, especially as Finance Minister Kan has moved to distance himself from currency-specific remarks of late.
The second central bank meeting of the week will come on Wednesday with the announcement of the FOMC rate decision; once again the market anticipates no change to the Fed Funds target, but as always, the Fed’s assessment of the outlook in 2010 will be keenly awaited.
The third major central bank to deliver its latest policy decision will be the RBNZ late on Wednesday evening (early Thursday). Although many had been hoping for a shift in RBNZ stance towards a more hawkish rate path, the recent softness in New Zealand’s Q4 CPI has dented the prospect of an imminent hike. In December’s statement, the RBNZ stated it did not expect to raise rates before the middle of 2010, so any deviation in that projection to the nearer term would be strongly positive for the currency.

Japanese Yen to Extend Gains as Stock Markets Tumble

Posted by Mulder Venture at 12:46 pm

Fundamental Forecast for Japanese Yen: Bullish

- Japan’s Retail Service Demand Declines as Expected in November
- Consumer Confidence Drops for Second Month on Employment Outlook

The Japanese Yen is likely to extend gains, looking beyond a busy economic calendar to rise on safety-seeking capital flows as evaporating confidence across financial markets sends investors out of fleeing out of risky assets.

Friday’s closing bell marked the end of the worst three-day stretch for US equity markets since last year’s broad-based recovery in risk appetite began in March. The VIX index of stock option volatility, a standby “fear” gauge, surged 55% over the past three days to post the biggest gain since 2007. Investors had their pick of reasons to be selling: fourth-quarter earnings reports disappointed on revenues, which would have been overlooked last year but now is far more critical now that the end of stimulus measures is on the horizon and the economic recovery must become self-sufficient; US lawmakers dithered on whether Fed Chairman Ben Bernanke, a figure the markets view a key positive force amid the 2008 financial crisis, will be confirmed for a second term; US President Obama proposed wide-reaching new restrictions on banks’ size and trading activities; and stronger-than-expected Chinese GDP and inflation figures stoked speculation that Beijing would step up efforts to restrict lending amid fears the economy may overheat.

The widespread exodus from risky assets did not leave carry trades unscathed, pushing the Yen sharply higher against the spectrum of its major counterparts as investors sold high-yielding currencies covered their short positions in the low-yielding Japanese unit. With seemingly no easy resolution to any of the issues now weighing on investor confidence, more of the same is likely ahead. Indeed, the short-term correlation between a trade-weighted index of Yen’s value and the 10-year US Treasury note, the benchmark safe-haven instrument, now stands at 88% versus just 66% at the beginning of the week.

The economic calendar does not promise any significant deviations from established themes and seems unlikely to derail risk-driven trading. The monetary policy announcement from the Bank of Japan is unlikely to bring anything new beyond the now familiar warnings about deflation and the need to keep policy accommodative. December’s trade figures are expected to show that exports rose 7.3% from a year before, the first increase in the annual growth rate in 15 months, but year-on-year comparisons were invariably going to turn positive assuming anything shy of continued freefall when compared against the record-setting collapse in late 2008. The same can be said of December’s Retail Sales report, which is poised to show the first positive annualized reading in well over a year. Labor market and CPI figures round out the week, with an increase in the Jobless Rate and continued deflation all falling firmly in line with what has been priced into the Yen exchange rate.

Currency-Experts bet on USD-JPY.

Posted by Dennis Ariens at 6:44 am

A nice update of Saxo Bank, the Danish newcomer in the Dutch banking landscape, on developments in the FX market. Several analysts from Saxo see a sharp move in the dollar-yen relationship USD-JPY. According to John Hardy, FX consultant at the Danish bank,

Another expert from FX Saxo Bank, Nick Beecroft, believes the Japanese finally want an end to the overvaluation of the JPY. “The Bank of Japan believes that this might be one of the reasons why deflation seems to be so stubborn. Their recent rhetoric suggests that they search  for quantitative expansion, or at least will keep interest rates low, perhaps even both. ”

Meanwhile, according to Beecroft huge issuing of Japanese government bonds also seems to be a threat. “Imagine a” buyer’s strike “which can cause the interest rates to raise by 1% or even more. This scenario is not completely unthinkable, considering that the overall market looks at current tax exhausted countries with more than just suspicion. We could be heading toward a  crash. “

Forex Trading: USD against major currencies

Posted by Byung Koo at 3:12 am

Tomorrow biggest news event of every month. NFP(Non-Farm Payrolls), Wednesday we saw an worse drop in jobs in ADP report.

The U.S dollar trading this week in a small range against major currencies, except Australian dollar who rally since the beginning of the week. What we could expect next week for the U.S dollar?

We will see a stronger U.S dollar next week and it will start Friday after the numbers. Because it’s very unclear where the U.S economy stands, the number will be bad or good. Analysts expectations are 0k. The number implicate that they even don’t know. Two scenarios:
What’s gonna happen in U.S dollar if we get another surprise and let’s say the number is + 25k-50k. First move in the U.S dollar is down against major currencies. People believe in more risk appetite but after the news settled the U.S dollar will start to rally because the expectations in rate hike later this year will raise fast. The movement will hold and even rally more next week.

Different scenario, bad numbers like Wednesday, like -50k-100K. The same patron will follow as above but on other reasons. First move in the U.S dollar will be down, because investors/traders see a bad number about U.S economy, so last number was one surprise not more, no continuous. This movement should also be covered by a rally in dollar because the stockmarkets will going down rapidly and investors buy the dollar, investors look for safe haven currency and downgrade risk appetite. This movement will start later than first scenario, because often you will see stockmarkets will hold steady on Friday trade, but for sure next week the U.S dollar will rally more than in first scenario.

Trade with smaller lots sizes than normal, because the movement after NFP are big for sure. First important number of the year 2010, so look out and trade carefully.
For exactly levels to take position is hard to say but few examples.
EUR/USD key level to take short positions: around 1.4550 if EUR/USD in range of 1.43-1.44 before numbers. Would EUR/USD stands before numbers like 1.4450 or higher, take short position at around 1.4650. Main key level in EUR/USD and also major resistance level is 1.47. Mulder Currency Fund would trade on the short side but main key level and support level is in EUR/USD around 1.4175, break this level we will see 1.40 very rapidly.

For many investors in other major currencies against the U.S dollar the movement will be more volatile. GBP/USD trade right now around 1.60. Go short on 1.6250 and main support level is 1.5800. USD/JPY shortposition at 93.50-94 and support level at 92.

After the numbers their will be also a big movement in other currency pairs, major movement expected in GBP/JPY and EUR/JPY.
Different story, Yen is last week ultra-weak, so if the NFP are better than expected, big movement up and not with 100 pips, maybe 300 pips.
Key resistance level and Mulder Currency Fund take short position in EUR/JPY at 136.00 and for GBP/JPY 151. Sometimes I think by myself I put my order too high, no fill but for sure after few secondes after NFP numbers I happy I put that order. For all traders if you trade well and love the volatility in the currency markets, you could earn a lot of money in one hour. Sometimes the same money what you earn in the rest of the whole month.

So please trade careful!

USD/JPY trading range 90-92,50

Posted by Byung Koo at 1:24 am

The Japanese yen weakened for the sixth-day, with the USD/JPY rising to a two-month high of 91.88, and the pair looks poised to test the October high at 92.34 as investors look to unwind their dollar-backed trades going into the following year. The dollar-yen remains higher on the day after moving approximately 50% of its average true range however, the intraday rally looks to be overdone as the 30-minute RSI falls back from a high of 72. As a result, we may see the USD/JPY trend lower going into the Asian trade and cover the gap from the 100-SMA at 90.86, but the broadly based strength in the U.S. dollar is likely to keep the pair above the 100-Day SMA at 90.99. As the reserve currency begins to lose its strong correlation with risk, we may see pair continue to retrace the decline from earlier this year, which could push the exchange rate towards 92,50, the 50% Fib retracement of the yearly high to the yearly low.

Strategy: flat

My prediction is a narrow trading range for USD/JPY the next month. Resistance level of 92,50 and support ‘key’ level of 90. End of January we probably see an outbreak up of down, depends on the current economic situation and the predictions about the possibilities of interest hikes of several Central Banks.

Risk Aversion Leads Equities Lower, USD Higher

Posted by Mulder Venture at 2:37 am

A new week begins and risk aversion is the dominant driver of FX markets. The broad USD move lower began showing signs of fatigue last week, and after some disappointing US data (durable goods orders, existing/new home sales figures); the markets have reined back their longs in commodities and risky assets.

Gold is having to re-familiarize itself with three-digit prices (trading at $988 vs. highs last week around $1020), and crude oil is down over 8% from this time last week after US inventory numbers last week revealed a glut of crude and gasoline supplies. The euphoria of global recovery always felt slightly overdone and now it seems markets have snapped back to reality somewhat. P/E ratios for the S&P show equities are still expensive; trading around 19 times profit, much higher than historical averages (16.3 over the last hundred years); despite our belief the longer term trend is for appetite to return and the USD to continue lower, for now we respect this correction in the market and will look to the broader indicators of market risk sentiment (Shanghai Composite, Baltic Dry Index) to direct our FX trades.

The G20 did not precipitate any firm policy initiatives; discussion of banker pay featured on the agenda, but this topic always feels like a populist distraction from the more important issues. The communiqué reiterated commitment to continue stimulus measures which should appease any fears of premature exit strategies; it also seems the G20 are leaving themselves flexible to allow for differential withdrawal of stimulus across countries in the coming months.

There’s very little on the data calendar today, but if the previous week has taught us anything it’s to watch out for policy-maker rhetoric. After Mervyn King’s devastating effect on GBP last week and ensuing criticism from traders, the Bank of England responded over the weekend that they were not trying to deliberately talk down the currency, though this provided little  boost to GBP after the fact. Japan’s new Finance Minister Fujii is also learning the pitfalls of easily-misconstrued comments after being quoted overnight that “it would be a mistake to use FX policy to defend industry” and “recent USD/JPY moves not abnormal”. USDJPY dropped on the news, taking out stops through 89.00 before Fujii returned to say that his comments were misinterpreted and were not intended to reflect government support for a strong JPY. USDJPY pared back gains to 89.60 levels, and one can’t help but think the new Fin. Min’s credibility may also have lost some ground in the process.