AZIE RAPPORT (by Linh Nguyen)
Jan 30, 2009
What a nice way to rattle the cages of every major companies worldwide; job-cuts pay-cuts, you name it they all get HIT. Big names like Sony and Toyota have to follow suit to save their skins, no more denials as the next wave of wild waters hit the shores of Japan. I don't mean to say that these two big names will go bankrupt, but for sure they will have to wake up to this unkind reality that was created and compounded over 5 years while the world supported the BUY BUY and buy some more attitudes.
Currency ratings
You have heard that countries like Spain, Portugal, New Zealand have lost their ratings…. But this is what you will hear from me.
How can a rating company change its mind about the currencies such as NZD after it has plummeted 50% across the board? Isn't it too late? They should have done so when the highflying NZD lost 28% from its peak. But no, instead the world was preaching people to go in on the carry trade phenomenon. (NZDUSD Peak 0.8200 and now 0.5100… NZDJPY peak 97.00 and now 46.00)
Again, why haven't they cut the rating of GBP? GBPUSD peak 2.1100 and now 1.4200… recent low was 1.3500)
Do I need to add more numbers?
Conclusion, DON'T trust your rating agencies because they too do not know what they are doing!!!
Technicals
USDJPY going nowhere despite USD rallies elsewhere. Stay out of this pair because the frustrations will only waste your time. I still stay with my comments that usdjpy will dig deeper to test the nerves & pockets of the B.O.J …. Expect major defense before 80.00 line BUT she could go as low as 72.00 before any major come back. (at writing 89.90s)
EURJPY still holds the trump card over its EUR pairs. It was only a few months ago that people talk of the euro as the new currency to trust. And now with the eurozone sinking under heavy waters, I don't think euro is worth holding. EURJPY on the cheap is 96.00 or worse, stay tune for the next move to punch a new low!!! 110 will crack and that should take in enough water to test the magic number 100.00. On the upside, there is no rally or bullishness unless 131 top can be broken. (at writing 116.30)
GBPJPY getting hit from all directions as the Pound loses its standing in the world market. I only see people taking profits on the eurgbp just before the magic 1.0000 figure. Nothing else out there is enough to push the pound up For now I do not think 119.00 can hold the next wave. Look out for that magic 100.00 line so buy if you must at 102…. (at writing 218.00)
AUDJPY , CADJPY and NZDJPY are all going where I said they would over 1 month ago. Have no doubt that they WILL dig deeper.
December 28, 2008 and the New Year 2009
Don't expect anything positve as the world will wake up to reality after their festive modes.
Central Banks around the world are effectively throwing money at you in their so called "Monetary Policy" to induce market participants into buying up stockmarkets.... or atleast hold up the current bottom. Sure, believe your fund managers that the bottom is holding, and lose billions of $ and I am sure you have heard it all.
The bank of Japan went through nearly a decade at ZERO interest, and they were too lazy to lift interest rate past 0.5% for nearly 3years... have you wondered why the carry trades went so HIGH? then dropped so LOW????? and iam sure their government is blaming the US Economic Crisis for it, but hell yes that their export industry will pay for it now that the Yen is making new lows agains all major currency.
Living in Tokyo now and watching their pathetic politicians at work (actually all politicians anywhere in the world are crooks in a suit and well paid retirement packages), and seeing news of mass layoffs at big names like Toyota, Canon, Sony etc..... the news are very hard for the locals to digest because the employment system in japan makes it nearly impossible for you to be fired.... and here most men are expected to live out their working career at one compnay and it does not look good to have more than one company listed on your Resume!!!
These big companies will surely weather this storm, but too bad for those workers believing in the brand names and now dont even have a roof to live under as most of these companies provide dormitory nearby the factories.
Afew things to expect in Jan/feb 2009
1. more banks to run out of cash... example is the Great Depression which took people 4years (1929-1933) to find out 5000banks went bankrupt in the States. Yes, a very slow and painful progress.
2. more midsize companies to follow suit and close their doors because they are not getting businesses,... if the Big Three are closing their production lines for 3-4weeks, you can guess how many business are effected. They too will have to close their doors, but permanently because they can not get bailout moneys from the fed govt.
3. Central Bank interventions, from the likes of BOJ to defend the USDJPY 82.00 line and Feds printing out more paper money, some other countries will do a better job by suspending trading at their stock exchange.
4. like I have said before that there will ALWAYS be buyers in the carry trades so let the buy it up for a nicer drop to make new lows in all pairs.
5. Nikkei index will have to gain another 10% and stay above 9200 before any bottom is affirmed. (currently 8560)
6. Central banks will copy what the BOJ did a decade ago and drive their interest rates towards ZERO. Your governments might call it "Monetary Policy" but I call it madness because if goes against the law of Macroeconomics... and will the world wake up to see the future damage?
Technicals........... if you need to know more about technicals, I suggest you read up on the Ichimoky Clouds!!
USDJPY the bad news coming out of the New York trading sessions were not bad enough so people started buying back those positions, I would not blame them either now that the year end holiday is here. I will stay with my SELL opinion until the 102 handle could be retaken. Why 102? simply that was the line defended by the BOJ for 4years and it gave way. Still 1200pips away, and.... so let the buying do their business. 97 will come up as the next top, and on the downside sell below 89.40 but let goodnews buying it up for a nice drop. (At writing 90.60)
EURJPY oils falling badly so do not expect any help from that pillar and when the Nikkei index is ready to go down, we will see new lows in eurjpy. 131 will be the top to climb over before I can change my negative position so buy if you want to and sell when you can hopefully you can cash in on the nice drop to 110s first .....then as far as 96. (At writing 126.50)
GBPJY has lost all hopes for getting buyers because big players are saying "it is too risky to hold on to the Pound". If only you had taken our advice to sell, sell sell when she fell through 205!!! You have heard headlines calling for the EURGBP to be level at 1.00.... hahaha the smart investor websites only say that because the market is already at 0.9100s and this is what you will not hear elsewhere; "Lookout I think the bear hear is pushing GBPJPY for 100.00 !!!",..... currently only 500pips from the all time lows so expect alot of volatility as she approaches that line. A jump of 800-1000pips is very likely after she makes new lows. (At writing 133.20s)
CADJPY will look to test sub 60.00 area before any real rally. Still has alot to drop and bullish Gold is the only support left for the CAD, now that Oils, Canadian economy is underwater.
AUDJPY will look to crack below 55.00 and see if she could sink deeper into 40.00 territory
NZDJPY will look follow suit and see if the all time low of 42.00 (date back to Nov 2000) could provide some support
HAPPY HUNTING
November 22 and the weeks ahead
Look out! I say let them fall and reshuffle the entire industry of car makers and as well as banks. Citigroup is in more trouble than they have owned up to and more dominoes to fall if this big one follows suit. Likewise the automobile industry is in a panic as the top3 are begging for government cash. Don't get me wrong that the world is better off with more car makers not less.... but are the US taxpayers ready to put out such a burden?
Alternative, let them go into bankruptcy (GM or Citigroup or whatever big name a company has on its tag).... then let the bankruptcy court cut all the bad assets and reorganize it as a better company in the future. Can you believe that some countries have implemented bans of short selling? What are they doing?
Nothing else new to add just "whatch out for that new lows".
USDJPY broke out of the 95-100 range and now back inside. I am not a believer of any bullishness in this pair, not until she has closed above 102!!! slow movement inside this range will frustrate one side of the equation to force a breakout and clear off some weak players. Expect a big bag of stoploss below that 90.00 area as well as above 100 area. More heavy swings are to be expected in the stock markets though. (At writing 95.90s)
EURJPY has yet to crack 115s and when it does the floodgates will open. Fundamentally, there are plenty more sour eggs out there so let buyers do their business on any lies and denials that come out on the news, and when reality hits them .... it will all come down to earth to seek out new lows. Expect an empty pocket lying below 115 and when it burst... my crazy forecast of 96s would seem more likely. Until then, I will not sound as believable. (At writing 120.50s)
GBPJPY not so lucky as the other two pairs as traders loss faith in the pound. New low has been registered so i would expect things to be heavier from now on. Still more to come so don't bet your money on any bullish move yet!!! Like i said before this pair will bounce 800-1000pips out of its lows quite easily but only to register new low. Just a REMINDER, her peak a year ago was 251 and her low this month is 138..... can you see any bullishness in this?I don't. (At writing 142.00s)
Good luck if you are a carry trader. I will sit out until the big US Govt could write a new blank check to save ALL banks and everyone else in the corporate worlds..... at the expense of the taxpayer of course.
Nov 14 and the weeks ahead
You have heard it all as the US has cut their rates to the lowest level since the 1950s…. that is not new and will they go lower? And what insignificance the BOJ's move was… I mean cutting their rates by 0.20% is not enough to inspire the carry trades to come back to play. I think Speculators want the BOJ to bring back that ZERO interest rate policy for another decade so they can load up on the yen loans….FREE OF CHARGE (or close to it at least). Sure, all the bankers around the world is gathering in New York now to find a solution, I only have one comment; "these central bankers have not figured it out till now so I don't think they will ever do". You will see more rate cuts and printing new money and more job loss as economies worldwide wake up to their reality.
Technicals
USDJPY is the only thing holding back the fall but look closer and you will see that most yen pairs are sinking lower and lower. I will stay with my comment that they all will make lower lows before any recovery could be seen.
USDJPY still a tough nut to crack but she is showing more volatility than before as players look to break the 95-100 range and trapped at 97 does not give any direction to place a trade. I don't see the US getting out of this crisis in the coming months so stay out of the buying side in anything like Stocks or Carry trades. And I don't think any bank or company is safe from the selling… unless the government could be bribed into putting a ban on "short trades". Look for sub 90 area is a better bet for now rather than betting on 110 handle, which will eventually be met in a 5year span. For a bullish move, you will need to stay above 102, that crucial area once defended by the BOJ for 5years. At writing 97.20s
EURJPY still getting pounded on any weak economic news (alias the reality) and a small round of buying on any comforting news from the government (alias more denials). Nothing more to see so keep your eyes out to see which direction she would head first; sub 100 or above 130? Closer to 115s will open up the floodgates to my "crazy" forecast of 96 is the better bet…. And ability to stay above 130 will bring back a bullish move.
She is still way below the cloud so I don't think any bullish move could be sustained. No bullish divergence is visible either so stay out of the buying if you can. At writing 123
GBPJPY still getting pounded as traders could not find reasons to buy the GBP. Like I have said months ago that the UK is full of bad economics. The macro perspective of the coming months will only get worse!!! For buyers, go for a long vacation and hope that the market could bottom out when you get back. For sellers, look for that top at 160 to be confirmed or even sell a break of 139 for a 1000pips move. In the short term, players will want to get back into the 160s area…. But any wave of selling will be faster and deeper. At writing 143.30s
A final note
"When is a product cheap enough to buy?"
There is no such thing is a bargain purchase!! Unless it was made with people behind the scene pulling strings. Look at what happened to Dubai's investment in CitiGroup half a year ago. Their investment is currently valued 1/3 of what they paid. Likewise with what Chinese banks paid for Blackstone & other cheap US assets…… they got burned there too. And now it is the Japanese' turn to buy up US Assets at a much lower prince and a stronger yen… that's a bargain from the point of view of Japanese investors. I wonder how much their investments are worth by the end of 2009.
October 29 and the weeks ahead
Let the market prove us correct and don't trust what your newsman or any analyst at those major banks say. They are just as bad as the weatherman…. Exactly 1year to this day news all over Japan say the yen is worthless so "stock up on foreign currency"… and now they say the "yen is strong so repatriate your money"……silly do they realize that repatriating their money the past week would mean 40-60% less that what they shipped out of Japan one year ago. I am sure our readers could do the math and see how far GBPPJY, CADJPY & AUDJPY have collapsed. The USDJPY is the only thing slowing up the fall. Look out for the next wave of USD selling!!!
More rounds of rate cuts…. Not surprising at all and the world has forgotten the fact that Mr Greenspan recently was blamed for keeping the US rates too low for too long which caused the excess of liquidity in the first place. Sure on the macro scale, interest rates should be used to ease the Monetary Policies. But the world was not prepared for the modern ways of leveraging and new breeds of derivatives. More speculations that the US and Japan will cut rates. Great, give them cheaper credits to leverage up the stock markets, at the same time inflate the world with more toxic Derivatives, higher cost of Oils & cheaper credit to bet on higher Gold to come.
As the rate differentials gets closer in the Yen pairs, I am still expecting further collapses in these carry trades. But first let the buying parties play their part…..then will come the larger and deeper swing south!!
Technical
USDJPY what can I say? The 90s area was met and let the world panic in despair if they have loaded up on USD back assets. One reminder, some countries deeply affected by the current crisis will have to sell their USD to inflate their own currency; naming the Koreans have done so already and I wonder when the Chinese will unleash their $1.5trillion of USD assets. As for the Japanese, it will be a case of "damned if you do and damned if you don't"…. simply they have run out of cash to buy more USD (= deflate the Yen) to save their export market. Unless they can print more yen notes. For the time being, I don't think the BOJ is crazy enough to go back to the Zero Interest Rate Policy.
100-102 area is the top to beat before more buyers could come back to play this carry trade game. Sub-95 will send her all the way to 80 before world economies could be brought back to equilibrium. (at writing 96.50s)
EURJPY finding plenty of buyers in the 114-116 area and has propped up well so far. The previous bottom of 127s will the new ceiling to hold down any rally. Stay out if you are not in the game and wait for a good chance sell again. Will this pair go all the way south to 96s? yes, that would be a tough call and expect more volatility as this pair makes deeper lows. The cloud has no indication of a reversal so what we are seeing now are bargain hunters coming in to stock up in the Euros and hope for the glory old days of 160s. (at writing 122.3)
GBPJPY still no fundamental reasons to buy except more cheap credits to come out of Japan and the US…. Don't forget to include the fact that European nations will have to cut rates a few more rounds to save their economies…. Unlike the BOJ & Fed whose rates are closing in on the ZERO side. If you are a speculator and betting that the UK will get out of this current recession within 6months then load up on the Pound…. Beware of further losses in the GBPUSD & GBPJPY and they could easily fall another 2000pips. Surely that both these two pairs will regain their 2.0000 marks respectively but until a bottom is in place with clear reversal signals, I wouldn't want to catch this falling knife. (at writing 154.20s)
Further note: look at the remaining AUDJPY, NZDJPY and CADJPY….they have all made historic lows and expect the selling side to have the upper hand. In totality the current lows established will only serve as a new traffic signal to head deeper south and further extensions will be of 1000pips deeper into last week's lows.
October 17, 2008 and the months ahead
What else can I say? For those who have not read the headlines, here is some quotes I would like point out that says it all;
“more bailouts”
“in a bull market nobody listens, in a bear market no one pays you”
“near bottom!” “cheap assets so lets go in and buy”……. Yes do what these peoples say and they have been saying it since March 2008……
“redemptions” “forced selling”…..
So will the Feds pump in more trillions to save more banks? Sure they will and what’s in it for the taxpayers? Yes, future generations are stuck with this burden and the old ones making this decision & creating this mess will be long dead so they shouldn’t care about any consequences. Read my previous reports below then you will see where I am at.
Any solutions? Before any solutions could be brought on the table, I don’t think the central banks will let their big 2 banks fail….. and those banks know they will not be let down if they have friends up there.
My two cents;
1. let them fail so that future corporate stars can learn these hard lessons
2. Stop cutting interest rates because it would only encourage reckless investments; namely Japan who is keeping it at near Zero… and they have been doing so for over a decade mostly at ZERO. If that is not cheap loans, then I do not know what else to say.
Conspiracy theory
I smell a big rat out there as bigger boys take out their competitors…… and believe it or not many central banks are lending a hand in rescuing bigger banks, who are doing more of the dirty work with their bigger accounts.
Here is what I think is bigger around the corner, it is that big bear waiting to push deeper as the world realizes that it will take more than $3trillion to bring back liquidity in the finance sector, and most of all these “quick fix” policies will run out of steam eventually. Now, I will be proved wrong if the world pumps many more $trillions to inflate their stock markets…..Or the central banks can close down their stock exchange fast enough to prevent any more dealing full stop!!!
Technicals- one comment, when the world is done selling the EUR & GBP, they will go back to check reality on the Dollar front.
USDJPY my crazy view that it would drop 1600pips was proven wrong as the bears were could only muster 1000pips southbound. Not out of trouble yet, we will see how much losses the Bank of Japan will incur when they run out of money to buy the $Dollar bills. Simple math; if you are sitting on over $500billions of USD bills and the market pushes below 90.00 mark then it would be nasty to work out how much your basket of USD is worth. Currently 101.40
EURJPY that one true pillar has lost half its value since topping out at $144 in March 2008….. and oils now is hovering at $70 mark oils…. And was I so right that “I still think this pair has 2000pips to give back before she could make new highs” ? Well, she did better and pushed as far as 133.00 and don’t think she is ready to pull back yet. Next key support lie at 126 and it is too scary to do my maths for what could be potentially lethal below that line. Currently at writing 135.50
GBPJPY and the Pound did a free fall to mark a low 167….. and I wish she had hit 164 area so I can rub it in!!! sure, what is bad for the UK economy can not be good for the British people … and it is this pair that gets hit the most. Have you wondered why? I think it is thanks to those big investment houses loading up on the yen loans and when it is time to pay up, they became “forced sellers”. Stay tune for more losses despite the 1200pips bullish move & the temporary recovery of stock markets. Currently at writing 175.20…… And I am digging up my history books already as promised to research the old time lows & highs to see where the recovery might get a signal.
September 23 and the weeks ahead
The Feds pumping nearly $1trillion into the financial system to hold back this fall. Not to mention the attempts by other Central Banks as they have $trillions more to use. Buying bad assets is never a good gamble; but then if you have unlimited resource then WHY NOT? My best advise for now is let them buy and when they are through the sellers will come in to see how deep the stock markets & JPY pairs could fall, also the USD to be treated appropriately as investors worldwide see how bad the US economy is.
For our readers;
Have you made a bag of pips on our comments? Or at the least, get out of those long positions in time before the fall as we predicted.I am sure plenty of big sellers are making moneys thanks to the collapse of Fanny Mae & Freddy Mac, Lehman & AIG. Going short or simply loading up on option puts would have made a fortune in the past 6-12months. We were the first to warn you mid-2007!!!
Saved by the FED;
I say; “let AIG suffer for its sins”….. but then they got lucky and saved by the unlimited source of taxpayers’ moneys….. and why not Lehman? Well, you all have read the headlines. Yes indeed, the domino crash was prevented….. but my question to you is how long could they keep this up? Did the Feds tell you how much these big banks are paying their CEOs in good times?....$millions and even $hundred of millions… so why should taxpayers pay in bad times?
A reminder;
Erik has spoken all along of this Tsunami…. And I can assure you that the rest of the world does not have a clue of what he means, even with the help of a dictionary. Only a limited few could understand how the tsunami occurs. Also, ask yourself again; “has the Amerkan.com team been right all along?”
Last quote by the Feds;
They are effectively saying “here is some more money to spend, so inflate the market as much as possible!!!”. How much more of this monopoly moneys would be needed to stem the fall? A LOT more $trillions.
Ression/Depression scenario
Everyone is crunching up numbers and tell you stories. But here I will tell you that the big bear wants to push southbound and see if they can reach those depressing numbers. For most people sitting on their share portfolios losing 30-60% already this year….. believe me there is more to come; especially shares in your banks & those big name institutions as more dead bodies come out of the closet.
A bad bank;
Forget all those bad investment houses for now, the main culprit of them all is the Bank of Japan. Why? For over 2 decades now they have tried to deflate the Yen so they could benefit in their exports…..sure it is all fine when everyone is loading up on the yen carry trades. But the world still does not fully understand the damage that Yen Loans have done and I would expect more companies to fall because they have used this leveraged bet against the yen to do their business…. And now that the tide has turned, more will fall. Would you trust the judgment of a country that went through 3 Prime Ministers in 3 years???? I wouldn’t trust their central bank for sure.
Who’s next on the hit-list???
Many more to come…. It’s only a matter of how well they can hide from the truth. The bigger they are, the harder they will fall….. that will bring out the avalanche in waiting. Call it the domino theory, it’s all the same.
Technical view; if only you know where the cloud is heading then it would be easier to make pips.
USDJPY pair is getting a lot of external support as central banks panic to save the world. Yes, the Bank of Japan does have trillions to spend so they will step in to hold this 102.00 line. Where next? Stay out of buying unless she is above 109.70s…. why not buy a pull back? The recent bullishness was all done by the Feds & other central banks as try to save the world. I still think sellers will try for the sub-90.00 before any real bull could come to play. Currently 106 at writing. Am I crazy to say this pair will drop another 1600pips? YES.
EURJPY Go oils and carry traders have forgotten the fact that this pair has made lower low. Just like I said it would so “Brace yourself for another wild ride and I would favor the JPY to dig deeper in those so called carry trades”. Oils will try to keep the euro up and the falling stock markets will try to pull her down. At writing 155 and 147 is the new support to take out. I still think this pair has 2000pips to give back before she could make new highs.
GBPJPY Did I mention that the UK economy is in a mess a long time ago? So as much as the world is selling the USD, expect the same for the Pound as the next on the list. One thing though, this pair will easily bounce 800pips after making new lows so expect more volatility as the market lure more buyers into the game then plummet like no tomorrow. At writing 195.60s and I still think she will look for sub 180 area and as far as 164. I will review my history books as promised!!!!
Sept 10 and the weeks ahead
Inflation is on everybody’s mind but no one wants to admit it. Summary, Erik spoke of stagflation over a year ago and it’s all happening before our own eyes; companies all over Japan have been raising their prices for over 6 months now and by as much as 30%, every time they announce it (read reports below); inflation across Asia is jacking up prices globally because the west are too dependent on cheap Asian goods, labor and even cheap scrap metals!
EventJune 4 and the week(s) ahead
No news is goodnews…. And the world keeps on buying commodities. Look out for a new wave of USD selling just around the corner!! And have I told you months ago that a big bank will go to the butcher? Who will it be? UBS, Citigroup or many others still hiding in the closet? It is scary to even imagine how many dead bodies are hidden in that closet and most central banks would rather ignore it. An likewise big investment houses will keep pretending that a bottom in the stock & USD dive is over… but have you noticed Oils keep making new high? Sorry to see the world have to suffer as cost of living go sky high thanks to “Futures Market”. Gold has gained 40% the past year and just easing back now looking for that retracement line (maybe at 26% or 38%) before a bigger move to look for $1500/ounce mark. On the other front, Oils has gained the most as players shift their investments away from USD assets…. Can you remember when it was last below $70? Yes, 12months ago!!! For any simple Joe on the street, the price of gas in his car has doubled plus this cost has eatened into every other product he consumes.
Oh, not to mention, the bigger bear you should fear is when the BOJ start hiking their Mickey Mouse interest rate. Prices of Gas, Bread, Milk, wage and everything you could imagine is being hiked at a relentless pace in the past 2months alone…. (cost of imported frozen Chinese foods are excluded as they lure Japanese customers back into the trusting zone)… Wake up and smell the coffee because the Japanese officials will have to hike interest rates real fast to keep up with inflation (from both prices of Oils, raw materials & Chinese made goods). I have said it all along but a year ago it was a different story…. Oils was at $70/barrel & Gold was at $600s/ounce and you can do the math if you peak at the current market prices of these two commodity alone to see how much you will have to pay for your meals and everything else you might consume. Japanese companies too, have taken a tough stand to cover their pockets first by hiking their goods for sale UP by 10% and you can expect more of that to come. So will the BOJ come out and say their CPI is still at 0.4%? I DON’T THINK SO, and when they could no longer afford to lie, I am sure they will raise interest faster than you could imagine. MEANING yen loans will be in total chaos….. lets just see when the BOJ will wake up.
USDJPY multiple top is shown at mid105 area and things could turn for the worse unless economic data could shine to help the USD. Cloud is at 102-103 so that is too far for any advice on buying, and sellers will need to crack the jackpot but pushing it below 101 and test the BOJ’s nerves…. For sellers, sell when you get the opportunity but STAY OUT if she is above mid-105. Overall, I favor selling side but you just never know when big financial houses & central banks might come out with more lies to get confidence back in stock markets and carry traders back into buying some more. Or better still, they could always pump a few more $100s of billions into the financial market so rich boys could make more money on the commodity markets while the ordinary taxpayer pays more for their meals & gas. My Longterm view of it all, sure this pair will shoot for 114 without a doubt and do not rule out the possibility of a fall all the way to 84. Which way will the market go first? (at writing 104.40s)
EURJPY trying to get back into the cloud and 162 will be the magnet for most part of the week. This pair is still jammed between a weakening EURUSD, & USDJPY holding firm as well as any lies that would help traders to ease on selling the USD. Like I said previously that higher Oils will benefit this pair a lot, but a slight pull back will prove costly for carry traders here. Cloud area at mid-161-162 will have to be the springboard for the next move. Where to trade? For buyers, let this pair sink back into the cloud (or even as low as 159) and BUY above 163 later, and your confirmation will be to break the top at 165…target 170 and more. For Sellers, sell below 161.00 and hope that a bigger wave of selling is waiting at sub-159, target 148.00.
GBPJPY a bullish move above 205 proved successful but 209 resistance is too much to overcome at this stage. Support comes in at 202-203 zone is still the key to restart the bear wave… currently the market is trying to get back into the comfort of the cloud (203-204.50). For buyers, you have Oils on your side as long as she keeps pumping new highs, but beware of a slight pullback on profit taking in Oils will undo all the hard work. Stockmarket in Asia too is bottoming out, but we’ll need to see how well the Dowjones perform at key line 12,800 before Asian stock buyers could buy some more to bring back the bubble days or 1980s. For sellers, be patient and let the buyers bring you better rates to sell, and it wont be long before reality hits those fools thinking the US economy is on a recovery path… not to mention bad data is expect from the UK also. Above 205 is only for buyers and will need a failure at mid-208-209 to start selling, idont forget that sub202 is also good place to sell all the way to 190. (at writing 205.00)
May 22 and the week ahead
Any new news? Nothing much just seeing more USD selling. Most trading houses will say; “commodity market is the place to be”, but haven’t they noticed the strengthening of the JPY as the market loses her appetite for the yen carry trade? The Bank of Japan should be on the edge of their seat once USDJPY tests support at sub-100 level. Yes, the world is still dumping their USD into the commodity market especially Oils…… and it is the consumers who will have to pay!!!! Prices of your meals will rise and I still don’t see why Japan’s CPI is still near zero….. as they complains about the not being able to get out of this deflation era. It won’t be long before they will too raise their interest rate above current level of 0.5%..... it’s just a matter of how long they could lie to the world & their taxpayers.
USDJPY the Tenkan Line is trying to cross and I am sure buyers will do everything they can to prevent that happening. Cloud top at 102 will give some bounce but 104 will be key testing ground for buyers as they struggle to reverse this downtrend. Sellers will be lined up all the way from 104-105 and a bigger wave will pull the carpet below 101 cloud bottom. (at writing 102.90)
EURJPY holding up better than most thanks to a rally in Oils & Eurusd. Maybe we all know by now Oils = Euro!!! But keep in mind that a short pullback in oils will bring down the eurjpy house faster than it could be built. Sell below 162.00 & daily close below that is your confirmation. On the other hand for buyers, wait and see if good support comes in at mid-159-160.00 (cloud top) area. A break below mid-157 is needed to bring the downtrend back into new territory southbound. (at writing 162.50s)
GBPJPY falling just like the usdjpy major and we have seen that before. Many factors will add up on the negative side for the Pound; 1. bad economic data out of the U.K in the months to come, 2. more volatility in the stockmarket and don’t believe those investment houses out there telling you that “the bottom is in place”; 3. temporary pullbacks in Oils; 4. USD selling as the world converts their currency into EURO or JPY; and 5. more financiall loses announcements as banks wake up to see their bad bets are getting worse. The only signal for buyers is a break above 205.20, and for now a break below 202 is needed to drive to 190…. And I will surely study my history books if she should ever show mid-160s…… (at writing 203)
May 15 and the week ahead Commodity prices are easing back to test weak long positions & at the same time seeking new buyers. It won’t be long before we see new highs and what of the JPY carry trades? Like I said before that there will always be buyers in JPY pairs and other factors such as Oils & stock market indexes will continue to make their influence. The Bank Of Japan will probably sitting back now that USDJPY is above 100.00 par level and I am sure they will contemplate the idea of selling the yen to boost their export market. JPY pairs are trying to get a bullish move now that they are above the cloud, only one problem is that the first move was fought back and they all fell from the sky.... lets see if there is a second move to come.
USDJPY 105 handle is testing ground to hold for buyers and sellers will want to bring it below 100.00 for better times south. My advice is buy a break back above 105.20 or sell below 103…. for now you can forget what else happens to the world of stock indexes & oils etc etc (at writing 104.70)
EURJPY is truly tracking the movement of USDJPY because she can not get help from eurusd as this pair have lost grounds. 165 is key resistance to beat but at the moment I would think sub-159 is the likely target for the market to hunt and see how low she would go. (at writing 161.90s)
GBPJPY conceding grounds thanks to poor performance out of the UK and didn’t I warn you that after the market is done with selling the USD, they will see the Pound? There is no magic in what I say, though I have been writing less than before. Mind you the reports are still as good as they were. Good luck to those who are on the carry trade wagon and dreaming of 250 mark again, you will need to see a break above 205 & a sustained break above 209 also. As for sellers, I think you will have a better chance selling it back inside the cloud at 202.70s (at writing 203.80)
April 21 and the week ahead
Carry trades are back in town and the world thinks it is all good to buy now. Why would youblame them since OILS is making new high and stock market is trying to "bottom out".... Thats what the experts would tell you. Let the buying party go on until reality hits them and the fall will be faster and harder to take out recent lows. Big sellers will wait for the next trigger while Central Banks will do ALL THEY CAN to preven the world economies from falling into a big mess than it is.
USDJPY
I dont expect much good news from the fundamental side but it is only "how bad" that is making all the buying.. Not as bad will let the buyers go wild and they will have to take out 105.00 before getting the next bullish signal. On the other side, falling back below 102.50 will bring the sellers back to play ball. (at writing 104.00)
EURJPY
getting alot of support from OILS sky high once again, and so too has the receovery of stock markets.... but then Shanghai Index is pretty much 50% of what it was 12months ago. ... you can do the math and see where we are with the Nikkei & Dowjones. All these are factors determining the next direction of eurjpy. Technically; she got a good dip back into the cloud and now 500pips away from it ... meaning bullish until the next resistance at mid-165 to be tested. Good support can be found at mid-161 on dips.... I would rather stay out of the selling side until we see how this pair will perform at the old tops at 169....( at writing 164.30)
GBPJPY
Getting more bullish as she took out 205.00 resistance... where next? 214 is likely and only a fall back below 205 will trigger selling signals. Buy on dips unless support at 205 is taken out.... going lower will test support at 200 & mid-192. In the long term, i dont see fundamentals supportive of this pair so let the buying do its business and see how high they can go before it all collapse like a house of cards again. Stay close watch on how much more monopoly the Central Banks will pump into the financial systems to ease the collapse. (at writing 208.00)
Mar 17 and the week ahead
More USD being dumped as a major hedgefund collapse. Yes, Mr. JP Morgan was a wizard back in 1980s as he orchestrated the rescue of the US Financial system….he might have unlimited resources to save Bear & Stearn but that is still the tip of the iceberg….meaning I don’t think he can save 100s of hedgefunds awaiting.
More waves of selling to come so don’t hurry if you missed today’s actions. Big bears are here to stay and they will take any opportunity as a trigger to sell some more. When the market is done with selling USD, she will sell GBP.
USDJPY cheap dollar if you want to catch this falling knife. I wouldn’t dare to buy it while still below 105…. If you are eager to go long and earn easy interest then wait for a break back above 100.60
I still favor the selling as the collapse below 100.00 took her all the way to sub 96.00 … let buyers and profit taking do their share of the work then sell a rally all the way back to 99 & 100 (the new top resistance)… I don’t hear any commentators saying a bottom is established so it could easily go to 86.00s. Japanese officials are causing a wave of cries for the BOJ to do more and stop the rising Yen. DON’T forget the JPY is at historical lows against AUD & CAD & EUR the past month (currently 96.80)
EURJPY mid155 support taken out and the market has her mind on the year old support mid-148. She will crack eventually but higher oils & EURUSD are keeping the EUR from falling like a rock. Believe me IT WILL!!! 130s should be a better area to be for EURO ECONOMIES (at writing 152.70)
GBPJPY falling like a rock. I wonder why, it is the same theme and you can expect some hedgefunds out of the UK to be doing early selling before they too will go to the guillotine. We saw Northern Rock as a good example and many more will fall like acid rain because everyone will be affected. I have been saying 191 is a possible target “in coming weeks” but it is getting close now that buyers are holding the line up at mid-192. Sell a rally will remain the theme for weeks to come so take a nice entry and look for low 180s as first target and anything lower will be **** (at writing 194.20)
Mar 11
OILS ($109) is back as the leader in this carry trade theme and this has provided the support needed for all jpy pairs…. and when stock market gets a small rally then we have a bullish move to all pairs. So the US has decided to pump more money into the financial system!!! More monopoly money, that’s what I call it. Let the rally push things up and invite a new wave of selling. The ability of the market to hold on to their gains at the week end will reveal how strong is this current rally.
USDJPY not out of trouble yet and above 104 is where anew wave of buyers will be sucked into this…. I smell the BOJ at work and working harder to prevent a total collapse below 100.00 (currently 103.20)
EURJPY mid155 was the support and now she is above the cloud. Yes a buy is preferred but only as long as she stays above the cloud. Key resistance above 159.50s should keep traders bus. In the long run I still think she will take us to sub-150 and no selling until she is back outside the cloud (157.00)…. (at writing 158.40)
GBPJPY still following the usdjpy but with bigger pips!!! 208 is building as top and unless you are already buying at recent lows then stay out of further buying until she is above 209. Support at mid 203 is the bottom to take out. Sell once she is back below 206 with daily close below 205 is confirmation required. 191 is a possible target in coming weeks so there is no rush until a clear signal is offered. (at writing 207.30)
Mar 09 and the week ahead
The US is clearly in a recession and what’s news about that!! We told you all about it in Aug 2007 and repeatedly warned you of falling stock prices & the yen carry trades. Look at them all since the major fall of August 2007 then your maths will tell you how right we are and still are. The Dowjones now has clearly taken out support at 12000 and that spells more trouble for jpy pairs & on the Tokyo front, sellers are shooting down that 12,500 line and it is only a matter of time before they can drive it straight to sub-10,000 mark. That does not mean much for most readers but for those out there with their portfolio in Japanese stock (and US stocks also) should think again if they were to hold on to them.
Our twin pillars (naming; OILS & stock market indexes) are now fighting each other…… oils still making gains and this is often a good sign for carry trades BUT stock market losses are pushing usdjpy & gbpjpy to lower lows.
USDJPY still digging deeper despite some buying at the 102 support…. I suspect people riding on the back of BOJ buying. That is only the first round of buying and there will be many more!!!! And any 100-200pips push upwards would only invite players to reset new selling positions and aim for that magic 100.00 mark. Sell a rally is the main theme and lets see if carry traders (and exporters alike) can defend that 100.00 along with the BOJ. A reminder; Japanese and Chinese banks have more than $1trillion of USD in their foreign reserves each and will they be able to bite their teeth if USDJPY falls another 15%????? That is lot taxpayer’s moneys if you ask me. Both Tenkan & Kijun Lines are at 105.00 and I don’t see any positive divergence so any buying would be limited to that area. As for sellers, build up your positions on further rallies and where possible take profits once the 100.00 is broken. Next key support to look for is 86.60 but it might take months to get there so take profit where you can and reload when it is ready to fall again. (currently 102.80)
EURJPY stuck in the cloud once again (157.50-159.40) and I will stay with my position that above 159.50 is necessary for further gains. Higher Oils is keeping this pair from falling like a rock and as soon as oils is ready to lose back to mid-$80 zone then we should see this eurjpy back below 148.00… below 157.00 should kick start some nice rounds of selling!!!! (at writing 157.70)
GBPJPY is following the usdjpy to lower lows that have not been seen for 3 years. And most investment houses & Jp firms are betting that the BOJ will have to cut rates …. Well, now we all know why big banks can lose $billions thanks to these top decision makers!!! Support is building at 203 … just another nice bottom to sell a break…. And until then lets see if resistance at 209 is enough to push back any rallies, above that is 214. I still think 191 is a possible target in coming weeks. (at writing 207.10)
Mar 3 and the week ahead
Carry trades are now in trouble and that BIG fall did take its course…. And don’t say we didn’t warn you. Stockmarkets around the world have little reasons to buy some more and they are looking for deeper bottoms.
USDJPY that bottom at 105 is now history and sellers are testing the nerves of the Bank of Japan, who since 2003 made a lot of buying at 101-103 to save this carry trade… actually they were more concerned with their Exports market being damaged by a stronger Yen… that’s what I call protectionist policy. Will they be able to hold the fall this time? You have to consider new players are in town; naming bank of China & oil money. So which side of the fence will they place their bets? They could save the USD from falling further …. But it is questionable if they are willing to risk their $trillions of USD backed assets = meaning they could be the biggest losers if the whole world keeps dumping the USD. (currently 103.00)
EURJPY out of the cloud now and above 159 is where buyers want to be. I for sure would not be a buyer in this pair unless above 159. For now it is sell a rally and mid-157 look like a place to slow down any buying. Next major support can be found at the 149-151 area…. And it will also depend how long oils can hold above $100 a barrel mark, the higher oils can keep pushing the better it is for eurjpy to hold on to its gains…. Don’t forget the second pillar of “stock market volatility” as we have seen the eur can be badly hampered if stocks fall to new low (keep an eye on the Dowjones holding defense at 12000 & Nikkei holding above 12,500 line). (at writing 156.00)
GBPJPY has no reason to go higher since USDJPY is making new lows & Nikkei index too is has lost 1000points from its recent rally. Support at 205 is now out of the equation and 196 is very possible…. It might take awhile to get there but it will. Any rally upwards will have to stay above 208 & challenge the cloud bottom at 213. Good luck if you are catching this falling knife, I would recommend that you stay out until a bottom (IF there is one) could be built at 191s. (at writing 204.10)
Feb 19 and the week ahead
Carry trades are going in all directions, some retreating while others like commodities linked crosses are holding on to their gains. Oils is still high and that is the only thing holding back a BIG fall. Of course traders are still too nervous to buy in stocks despite recent rallies… those rallies have been giving a higher price for sellers to come back to sell some more.
USDJPY like I said sell below 107.80, the market has shaken out weak sellers and now they will seek out weak buyers just below the 105 area. It is 230pips away and one would think their stoploss are “pretty safe”… but think again. Tenkan Line at 107.20 is getting plenty of attention now and a break is expected soon. (at writing 107.40)
EURJPY getting some good movement across the board. Still 159 looks pretty solid and expect a small batch of stoploss above that area … but only as far as mid-159 will bring in big sellers to give some nice volatility. How well she holds up at mid-156 will be the key indication of this pair…. if support is not good enough then we will likely see 149 once again (at writing 158.50)
GBPJPY has no reason to get bullish while usdjpy & eurjpy are weakening. Like I said, 214 was the target for bulls and that was met… is profit taking going on? Or sellers are too strong as they push back and seeking that support at 207 & 205 now. if you want to buy then I suggest a daily close above 211 is necessary. Below 210 is sellers’ zone. (at writing 209.50)
Feb 14, 2008
So we have Mr. Buffet playing God to give people some hope in this crisis. Hurray and the carry trades are back in the game as buyers everywhere reacted to this news. Don’t forget that Mr. Buffet does not do it for free and he does have deep pockets to lose $billioms. Let see if they could continue to buy on the next batch of bad economic numbers coming out of the Europe, UK & New York. And don’t forget the fact that Japanese Banks are doing a great job in concealing their losses; history shows they did a damn good job for over 10years back in the 80s-90s that resulted in banks collapsing all over Japan. I am still bearish in the long term on these JPY pairs, but will advise accordingly where the bullish signals are in the short term.
USDJPY looking more bullish as stoploss above 108 got gunned down. The buying will need many batches of good data out of NY in order to continue its push, and when reality comes out they will sell faster than you will know. Look for a sell below 107.80 and let see if stoploss below 105 could be targeted next. Daily chart is very bullish with Kijun & Tenkan Lines (107.50 & 107.00) are now providing support on any pullback. (at writing 108.30)
EURJPY bullish also as she follows usdjpy. 159 is a possible target but the task is to stay above 158.00 … a break back below 157.00 is a good sell target mid-152 (at writing 157.80)
GBPJPY daily close above 210 was met and now she hunts for 214. However, failure to hang on to its gains above 211 will support at mid-209 and again 205…Here is a wide ball game with possible targets 226 or 194 for those with the nerves to hang in for the long ride. (at writing 212.90)
CADJPY pushing along slowly as JPY loses ground across the board. 110 is still key resistance while 105 is the low to beat. (at writing 108.60)
Feb 12, 2008
The world is going crazy and they look to G7 wisemen for guidance. And what did they get? A large bill on the taxpayers’ money. I am sure those central bankers still do not know how to solve the current disaster awaiting and all they could do is pump more $billions of Monopoly moneys to stabilize their economies.
It is now back to the two pillars that we have mentioned many times; naming stockmarket & oils. JPY pairs will fall when the Nikkei or Dowjones fall, and it will recover only because Oils is holding to its gains above $90 a barrel. Have you noticed I mentioned recently NOT to sell cadjpy?
Nikkei Index will be aiming to take out that 12500 support once again & Dowjones too will see if any buyers are on dips towards the 12000 key line.
USDJPY trying to get some bullishness at mid 107 but only to be beaten down by 108 resistance. I am sure there are plenty of stoploss above 108 & below 105 so which wway will those dirty players gun for first? They will probably take out both end of the equations so maek sure that you know how to profit from their tactics. (at writing 107.20)
EURJPY still weaker despite usdjpy holding strong. Sell some more if daily close below 155.00 … Tekan Line at mid-156 & Kijun Line at 157 so sell a failure when you see a chance (at writing 155.70)
GBPJPY a multiple bottoms is building at 205 on short term charts and will need to close above 210 to get a nice bullish run to 214. Failure to hang on to its gains above 208.50 will let sellers back into the game; first support 207 & 205… below that is just troubles and 194 is very possible (at writing 209.20)
CADJPY getting plenty of support from Oils & other commodities so it is a wise idea to stay out of this one. 110 is new resistance while 105 is the low to beat. (at writing 107.2 0)
Feb 6, 2008
The world is buying back the USD despite bad economic data out of New York. I smell a rat. Sell rallies is still the theme in JPY cross and stay out of usdjpy as much as possible. Of course usdjpy failure at mid-107 will again kick start a new round of carry trades running. It is mid-week so I doubt if there is much selling so let profit taking do their work & sell again when Asia shows us what they have in their menu; more bargain hunting or a fresh round of selling in the Nikkei… NOTE: 14000 is the key point for this index to get back its bullishness.
Everyone is talking about a recession now. TOO LATE. Our team spoke of even a “stagflation” as early as last September but did anyone listen? Maybe not. Those who did heed out advice would have avoided the crash in the carry trades as well as their investment portfolio.
USDJPY she has tried to take out mid-107 resistance but better sellers came in before the 108handle… use the buy backs in other majors as a chance to sell usdjpy again. Daily close below 106.00 is a good indication. (at writing 106.60)
EURJPY the market has taken out the 157.00 support and was that 180pips run good with our advice? Let profit taking play its role and sell some more when the time is right. Next support is 152.30s and mid-158 looks like a mountain top (at writing 155.60)
GBPJPY has no reason to differ so look out if you have stoploss below 207. you might be fooled with the rush of buying at low-207 area… but take my word for it that you will get cheaper rates below 194s so why hurry!!!! Only a daily close above mid-210 (where everything fell apart recently) will bring back some relief buying to target top at 214 (at writing 208.50)
CADJPY support below 105.50 was tested and broken BUT has since moved back up by 20pips…. Don’t think there is any bullishness there because she is now well and truly below the Tenkan Line. Above 107 will br better indication of any possible move up BUT it will still have to take out resistance at mid-108. (at writing 105.70)
Feb 5, 2008
It seems the USD is putting up a fight across the board. Its ability to stay above 107.00 keeps other carry trades from falling another mile. Midweek is not a time to sell so lets see if Thursday could reveal a better trend….
USDJPY requirement #1 daily close above 107.50; #2 take out resistance at 108.00. failure to take out 108.00 will see it visit support at 105.20
(at writing 107.40)
EURJPY economic data is starting to reveal the damage…. Maybe 159.50 is more difficult to get over. Stay with my previous recommendation. If not sell a break below 157.00 with 40pips stop and try again at 159.40s (at writing 157.70)
GBPJPY 212 is the place to test. Daily chart can go either way so stay out of the buying side if she falls below 210.30. Daily close above will get bulls back into the game but a break back below will put pressure on its recent lows. I rather sell this one but keep in mind the other side of the coin. (at writing 211.40)
CADJPY moving closer to the Kijun Line 108.50 and a failure could easily see it test the 105.50 support. Stay out of this one is the preferred choice. (at writing 107.70)
Feb 4, 2008 and the week ahead
January was a winner for JPY & CHF as carry traders were stunned by the harsh reality of a RECESSION…. Yes, read the headlines and u will see everyone is panicking but read between the lines and u will see a deeper and frightening truth about further crashes. Those tops at 117.50, 159.50 &214 are to be overcome if carry trade want to get back into the game. Until then, it is sell a rally and wait for the next round of bad economic data to sell some more.
USDJPY still stuck in this wider range of 106-107 and buying is not the preferred choice as long as she is below 108.00 … daily close above 107.50 is a small indication of a possible come back for the USD. (at writing 107.00)
EURJPY look for a failure at 159.40 to sell with tight stoploss above 159.80…. 40pips risk = target 150 (930pips gains) sounds reasonable to me. Also keep an eye on EURUSD and see if she could sneak up above 1.4900 again. (at writing 158.60)
GBPJPY 212 is the place to test if there are new buyers or will that line be the new top. 209.00 is the low to break and daily close below 209.50 will confirm the downtrend is back on track. (at writing 211.20)
CADJPY gold & commodities losing their shine as the market starts to buy back USD. A higher high in the long term charts of commodities has been achieved and that is a support for CADJPY. This is one pair I would not sell at the moment, unless a major stock market crash could take out the US economy thus infecting the world economies. Repeat: “109 is the place to be for buyers to have another shot at 116 & 124 while sellers will want to break back below 105 to test sub-100 waters.” (at writing 106.70)
Jan/31/2008
Another rate cut, yes as foolish as the Feds can be they are trying to put a break into the bear engine. Why aren’t carry trades rally like they did last week? Maybe those tops building at 117.50, 159.50 &214 are too much to get over. Whatever the case maybe, is the rally finished? If so, the next round of selling should take us to new lows.
USDJPY sell below 106.00 and first small support is at 105.00…. but a daily close above 106.50 could be bullish. Keep close attention to NPF numbers to come out this Friday, that might spark a nice round of selling, if not buy a daily close above 107… with caution at 108. (at writing 106.10)
EURJPY 159.50 was the top to beat despite a break above the previous high of 159.15… I don’t see much of a buying side unless she could break above 159.50…. downside move could put pressure on 152 & 149.00 support area. Maybe we need eurusd to turn upside down for the eurjpy to go any lower that 150.00 …. Daily close below 156.00 will confirm the next round of selling (at writing 157.70)
GBPJPY 214 is the top line resistance to get over for buyers…. But sellers are in control now and have to break 209.50 to put that 105 back into range. Kijun Line at 216.40 and Tenkan Line 209.40…. lets see if the market could break free of this range for a nice push either end. (at writing 210.90)
CADJPY gold & commodities are the winners in this modern day market as traders flock to them for safety… why would you blame the market if stocks are being sold and foreign currency is getting beaten up and down like a mad cow. 109 is the place to be for buyers to have another shot at 116 & 124 while sellers will want to break back below 105 to test sub-100 waters. (at writing 106.50)
Jan 28 2008 and the week ahead
More rate cuts this week from the US? Most likely but that would be more foolish of the Feds to pump extra cash into the market because it will all go to the commodities market rather than encouraging new business activities. Look out for a fresh wave of selling in the Yen pairs, but a big rate cut could give them more cheap loans to load up on the money train and party on for a few more days. Let the buying takes its course and sell when they have peaked out.
USDJPY still not the preferred pair to go in at the moment as JPY pairs making their moves leaving this pair back in its 105-107 range. I smell a rat in the making…. Will big sellers come out to make the next move or will buyers come into take charge of the Yen pairs. Buyers will try to make higher high and test the old bottom at 108.00 again and Kijun Line 110 resistance. Seller will have to keep it under 107 for more selling. In the long run she will have room to extend so 102 is a good target for sellers with bigger move lower if they could crack that 100.00 jackpot. I am not a fan of buying in this pair so look for a nice place to sell and we’ll see how the BOJ will react when it approaches 102 area (at writing 106.80)
EURJPY stock market is the determining factor at the moment and forget what is happening to the USDJPY & EURUSD majors. Was I right about the move towards 159.30? it was 15pips shy of that resistance and now back below 157. Where next? Only buy if support at 149 holds or buy breakout above 159.50…. anywhere in between is no-mans’ land and make sure you keep whatever pips you might get before the volatility takes it all back (at writing 156.70)
GBPJPY daily RSI provided a bullish divergence and support at 205 gave the bounce to mid 209…. It could be a bumpy ride after a test towards 215 but I think that will be met before a deeper fall. Sub 200 is possible in the coming months but if resistance above 215 is broken then she could shoot for 226. Either end of the equation is possible and that’s over 2600pips playing field in this pair. 210s should be a buying area and anything below that will see how many buyers are left at 205 once again. (at writing 211.70)
CADJPY that old support has at 108 has turned resistance so I would expect the next range to be restricted in 105-108…. Let see how long (not if) commodities could hang on to their gains before the next move to see if she would go back to 95s …. I once wrote in 2007 that the level of “equilibrium is 85.00”and anything above 100s is overvalue. The market will sort itself out and lets see when the world will realize that oils is way overpriced also. (at writing 106.00)
Jan 24 2008
Players are thinking it is safe to go in on the carry trades and let me tell you that there will be plenty of rooms to go down as the world is being taught a real good lesson on “the carry trade”. Stockmarket is getting a fee bonus with cheaper loans, and the buying continues.
USDJPY not much fun with that small range. The world is going crazy with its buying…. Tenkan Line is at 107.00 so that’s where you want to be above if you are already buying. (at writing 106.50)
EURJPY getting some relieve buying and 157 is the next direction and once above it she will try to get back to the cloud. Am I saying it is bullish? The market seems to go there thanks to a recovery in the Dowjones & Nikkei. We can start selling again when fundamental numbers come out to show how bad the US economy is in. Tenkan Line is at 156.80…if resistance holds then we could see mid-152 again, if successfully broken to the upside then we can aim for 159.30 where it all collapsed in recent move. (at writing 156.30)
GBPJPY daily RSI provided a bullish divergence and support at 205 gave the bounce to mid 209…. It could be a bumpy ride to 212 but I think that will be met before a deeper fall. Sub 200 is possible in the coming months but if resistance above 212 is broken then she could shoot for 226. (at writing 209.30)
CADJPY still getting benefit from the higher gold & oils…. 105.00 is resistance to overtake while 102 is the low to break (at writing 104.60)
Jan 23 2008
You have heard it all and the Fed is cutting rates to help the economy get back on its feet. But will that be enough? Like I said before that the rate cut will send all the moneys to commodities and carry trades rather than giving the economy a boost it need. Carry trades got a nice boost and bounced from its lows. JPY pairs reacted as expected to this good news but the usdjpy still trapped below 107. Don’t get your hopes up too high, overall I expect more selling to come in the coming week even if they could buy today & tomorrow…. Wednesday is often a day for buyers to go wild and they will hope economic data could give a follow through on Thurs& Fri.
USDJPY Still stuck at mid106-mid107 so look for the next sell opportunity. The US side has cut rates so that gives the BOJ more reasons not to raise theirs… so carry traders say “THANK YOU” … above 108 is where they would like to be to get bullish, whereas below 106 will kick-start some more USD bashing (at writing 106.50)
EURJPY has found a new low at 152 but bounced to 156. I rather wait. Mid 157-158 will be heavy resistance and see if it will provide good selling opportunity. Otherwise, sell a break back below 155.50 and don’t forget the fall will be faster than its move up. Tenkan Line is at 157.20 (at writing 156.20)
GBPJPY trying to get bullish but don’t forget the break below 205 was enough to push lower low on the weekly. It is still a sell until she gets above 212. Just let the buying play its part and sell on the next piece of bad economic data. Tenkan Line at 210 did well to push down the first move, buyers will try to get above it as a stepping stone (at writing 209.30)
CADJPY got the most benefit from the rate cut as commodity market rallies. I don’t think she is out of trouble yet. 102 is the low to break and stay out of the buying as long as it is below 104.50 the previous bottom. (at writing 103.70)
Jan 21, 2008 and the week ahead
Big banks are still clueless as stockmarkets continue its plunge. Look at the Nikkei losing another 500points and the newspaper is guessing what is happening. They will continue to guess BUT it is as clearly a perfect ingredient for more disasters; 1. Dowjones going lower as traders lose confidence in the mighty US Economy; 2. those collateral loan instruments are taking a hit and now banks are suing each other (or at the least are being sued for selling dubious loans); 3. Yen carry trades continue to unwind; 4. electronic trading is now everyone who has access to a PC and a credit card; and 5. leveraged positions of x30, x100 & even x200 makes the fall faster; and maybe you have heard more.
Where to apply the break? Let these government officials and bankers play the blaming game first before they can figure out how to assess the damages and understand the causes. It won’t be long before a major bank rollover and more people to lose their jobs.
Don’t forget there will always be buyers in these carry trades, namely; 1. long positions established to earn easy overnight interest; 2. Japanese Importers stocking up their USD to make monthly payments; 3. Japanese Exporters putting a fight in a hope to lessen the damages to their goods prepared for export, or worse comes to worse they will run to the BOJ and cry for help because the bulk of the Japanese economy depends on its exports.
Fundamentals; will the BOJ raise its rates? Most traders are betting that they will not raise as long as the US cuts rates. My opinion; “what happened to the basics of economics?”
Technicals:
USDJPY are stuck at mid106-mid107 as traders wait for the next big thing to sell or start the dream of carry trade once again. It will be in that range for awhile longer as the real fight is in the major EURUSD, GBPUSD & fall in JPY crosses… which effectively cancels out any gains in USDJPY.
I still think the market will test how the BOJ will react at 100-102 regardless of how much the FED will cut its rates on the 29th. Stay tune for more volatility and only a daily close above 108 will save the dollar from testing 102 this month of Jan. (at writing 106.70)
EURJPY losing more grounds as the market took it to lower low at 155.00, buyers will slow down the fall but with the way the Nikkei is falling I dare to say sub-150 is to be seen in coming weeks IF NOT sessions. Next key support is at 149 so don’t rush to buy anything yet. Only a daily close above 158 could save the day. Our viewers will probably think it is unimaginable to say 130s at this stage BUT don’t forget carry trades do fall faster than its move up. (at writing 155.20)
GBPJPY losing more grounds and 207 will be the key line to break in coming sessions so hang on to your seat and watch it fall another yard. 193-196 could be the next fighting ground and there could be small pockets of buyers at 202. Let see how far she could go up before another dive to sub-200.-00…. Like I said previously; “Don’t forget Nikkei Index is due for more losses.” And only a daily close above 212.00 could ease on the selling (at writing 208.30)
CADJPY currently holding on to its last hope at 103 and awaits for the next round of selling. Sub 90.00 is a better place to buy if you ask me. As for topside resistance is very heavy at 105-105.70 do place your bet on the right side of the fight. (at writing 103.6)
Jan 16, 2008
Government officials are expressing concerns at the speed of the drop both in their Nikkei Index & JPY pairs. That would not stop traders from selling some more. With oils falling back and not much good news from the economic data from the US or UK, it seems like a long time before these carry traders could be back on the scene. And you have heard it all, but what you did not get from the news is what we have been warning you all along since Aug 2007, and again in Nov & December. We even gave you some key points to the downside and they have all been taken out.
USDJPY losing the previous support at 107…. And like I said; don’t be a hero and try to catch this falling knife. Historically 100-102 area should provide a firm footing if you wants to get on this carry trade and earn “easy money”… the risk is IF you can handle the fall deeper. How deep? Try 86.00 or any sub-90.00 would be a nice place to buy again. Let see when the BOJ will start taking action and that should be fun to see how sellers will react. Technicals; above 107.50 will provide some relief buying and could bring back new sellers to defend the old bottom. Anything below 110 is still selling zone and see if 100.00 would crack. (at writing 106.00)
EURJPY seeking out next line of support…. Maybe 155 or 151? I don’t think many buyers are game enough to go in unless 149 could defend that bottom. Its all a sell a rally so look for an opportunity to sell. more stockmarket losses, fall in Oils, and any bad economic news will be the perfect ingredient for good selling to test any support below 150.00…. At the rate things are going we could well see 138 & 131 by the May. That is a big call, but I am sure you have seen that about my gbpjpy reports; “below 219 is 207” (at writing 157.00)
GBPJPY 207 has been met (actually 207.05 was the low)…. And still plenty of room to move south. How far can see go? Next guess is 193 6 even unseen territory since 2004 when she bottomed out at 180. and I wouldn’t be supprised to see the house go down further at 160s if we see OILS below $85/barrel. Don’t forget Nikkei Index is due for more losses. Any possibility of a relief buying? Of course as long as daily candles can make higher high for 5-7days consecutively. This would keep sellers away because the rollover interest is damaging in this pair. She is currently printing lower lows on daily so conclusion = sellers are in control. Above 215.00 is where buyers want to be but that is 800pips away and could be tempting for fresh selling. (at writing 208.00)
CADJPY lost that 106 support and commodities are falling also. Next support could be deeper at 95.00 and probably 80.00 if traders could not find rallies in commodities. The US economy is in trouble, and so too will the Canadian economy. If you are looking to try catch this falling star give it some more time to fall then try it at 90.00 with tight stop. sell a rally is still the main theme (at writing 103.90)
Jan 14, 2008 and the week ahead
A nice start to the year for JPY and this “one way” trade proves to be going down and looking for deeper support. Whatever Central Banks have plans for the year, iam sure it won’t stem the selling when players have to repay those trillions dollars worth of Yen loans taken out over the past 8 years. And like I said before that the near zero interest rate in Japan is the main cause of it all and the next trigger could be in the months ahead for more selling. The trigger may come in the form of more “collateral loans” similar to Subprime and expect more losses in stock market as we have seen both the Nikkei have taken out key support at 14600 mark.
Yes, Central banks will need to cut rates some more (maybe 3-4times) and inject more Monopoly Moneys into the market….. but don’t forget that might all go towards commodity because stock indexes are falling freely while commodities across the board holding firm to their highs.
USDJPY losing it all below 112 and sellers will look for every opportunity to sell some more. 107 will encourage buyers to play for double bottom but I think 102 is a safer place to buy… only because the BOJ will play their cards to hold JPY above 100.00 line and protect their Export market. They did a good job of it back in 2000 & 2005…. And they were the biggest winners in this money game after cashing it all above the 120s line. Early sellers will try a break below mid-108 or failure at mid-109 (at writing 109.00)
EURJPY cloud bottom at mid 162 will be very heavy and if you cant get another chance to sell, then play for a break just below 160.00 because there is more than 6daily candles forming a temporary bottom there. I do not recommend a buy at all unless daily candle could close above mid-163… the only thing slowing down the fall in this pair is OILS if traders start buying again to see if they could buy above $100/barrel, which proved to be hard to stay above (at writing 161.00)
GBPJPY yes the market is bearish the GBP across the board and more losses to be expect in coming weeks. Will economic numbers come out to the rescue? I first mentioned of 207 was back in Aug 2007…. I am sure many readers will think it is insane to predict a possible fall And I repeated that again in my December 12 report. Should she bounces back up expect sellers to be lined up at 218.50-219.00 and only a true break above 220 will be bullish again. Early buyers will need to stay above 215 to avoid a move towards 207, and at the moment things are bad for GBP on weekly chart. (at writing 213.20)
CADJPY currently looking for that old support at 106 and any bounce towards 108 will give late comers a chance to sell some more. Only buy if above 109 and sell some more if 104 is broken. Oils is the key player to determine where this thing moves, and don’t forget that a bad US economy will bring dark clouds to its northern neighbour also. Rally in Gold is still strong but that has proved little help for this pair in the past week. (at writing 106.90)
December 20
Carry trades are in deeper trouble BUT USDJPY is still where it was a week ago. This could be interesting to see if JPY cross selling is enough to bring down the USDJPY also, or will the USD’s stubbornness give everyone a chance for a recovery.
USDJPY same as where I was last time & look out if you have stoploss at 112.50s. the table will turn if mid 112 could be broken. Likewise mid 113 will have to be overtaken in order to head for 117.00. Keep in mind that false breakouts of the cloud is always what stophunters want. Yes, this is a dirty game because there are many people who will benefit from knocking you out of the game. (at writing 113.20)
EURJPY still trapped inside the cloud and closing in on the cloud bottom at 161.40…. below that will spell trouble!!! Sell some more if you see if fall out of the cloud. On the other hand, lower lows on daily is keeping sellers in control, BUT if she could get back control above mid 162 then a reversal is possible. That will also depends how EURUSD do as well as USDJPY at resistance mid-113 (at writing 162.10)
GBPJPY the bottom of mid-227 was broken and that cleared the way for heavier selling…. Next support at mid-224 is having a tough time now so don’t rush in just as yet if you fancy a BUY. Like I said previously, “next direction is 222”. I could be wrong mid 224 handle proves to be good support. (at writing 224.90)
CADJPY still printing higher high on daily so maybe I was right that 116 handle is on target. Oils is giving good support and a real test is at $95 before $100 a barrel coming ahead…. A move towards either target will surely put CAD buyers on track to test 116 resistance. (at writing 113.30)
December 18 and the week ahead
Carry trades are mixed right now with EURJPY falling hard but USDJPY pushing an inch higher by the day. Central Banks have been cutting rates the past week (naming UK, Canada & the US) has given the bank of Japan more excuses NOT to raise theirs. Thanks!!! This should be the leverage that carry traders need to stock up and buy to the sky…. There is more monopoly money going around so why not? The reality of it all will come out of the closet when the market realizes that it is all a phony game.
USDJPY above mid-113 is where buyers wants to be in order to go higher AND a fall back below 113.00 will make it fun for early sellers to come into the game. Sign of weakness can be seen already as the market failing to hold above mid-113. A daily close below 113.00 will be the go ahead and sell… first target is mid 110. above 113.50 will bring old memories of 115 & 117 lines. If you are buying then don’t dream of that 120 too soon. (at writing 113.20)
EURJPY looking heavier as she lost the top of 165 & keep making lower lows for 3 days now is a sign that sellers are in control. A daily close above mid-163 will ease off on the selling, and maybe even get out of trouble if she could stay above 164.00….. until then, I would not be buying. Cloud bottom at mid-161 could be targeted next before a real direction is seen. (at writing 162.80)
GBPJPY still strong above 228 and trapped between this 227.30-229.30 range. Above 227.00 still favor long positions to have another shot at 233, but stoploss below this area could bring it all the way down to 222. (at writing 228.50)
CADJPY buyers are doing a good job to stay above 110.00 handle and now has overtaken the Kijun Line at 113.00….. next target 116.00 is looking promising as long as oils & gold could keep above $90 & $800 levels. (at writing 113.00)
December 13, 2007
Carry trades are printing higher high across the board BUT struggling to hold on to their gains. This is a good sign that traders are getting nervous.
USDJPY slow but gradual push higher to find new resistance at mid-112…. Let see if the market can test the cloud bottom at mid-114 in coming weeks. Sellers could only get back in the game if the could send if back below 110.00. (at writing 111.90s)
EURJPY 30pips higher above 165.00 BUT giving back over 100pips proves that the market is running out of new buyers to push 100-200pips higher out of the cloud. She is STILL finding comfort inside the cloud 165-161 range….. Now that we have seen 3 attempts to breakout of the cloud but falling right back in, maybe the market is setting up for a test of the downside. Daily close below 164 would be necessary to get sellers back into the game (at writing 164.30s)
GBPJPY getting back its bullishness but only as far as the Kijun Line. As long as she stays above 227, it’s a BUY and playing for the cloud bottom at mid-234. On the downside a daily close below 227.00 will set things up for sellers to have a say, with first target 225 & deeper is 219. (at writing 228.70s)
CADJPY getting stuck at this 110 handle and will probably be there for awhile until traders know what to do with Oils & Gold movement. Will they go for this year’s high before the year end? I don’t think so. Sell will be good once she is below 110.00 and confirmation is a daily close below 108. (at writing 110.40s)
December 12, 2007
I don’t need to add much but it looks as though the bullish move by carry traders are coming to a halt and they didn’t get much help from the Feds this time…. Maybe they were just asking for cheaper (much cheaper) because 0.25% overnight cut wasn’t enough). Daily charts are in all sorts of trouble for these pairs and they will have to take out yesterday’s high or fall flat on their nose.
USDJPY first sign of weakness was shown and USD will have to stay above 112.00 to continue its bullishness. If not then that support at 110.50 will be hard to defend, with a big bag of stoploss selling to be expected. Still have some bullishness left BUT short term charts are in danger of going south and a break below mid 110 will reverse this bullish momentum. (at writing 111.30s)
EURJPY is now in all sort of trouble despite a short break out of the cloud. Like I said yesterday “Look again and you will see that she has yet to close above the cloud”…maybe the market is not ready to get out of the cloud. It would be safe to say 164.60-161 range to keep traders busy for awhile. I would prefer to sell failures at the top and see if cloud bottom would break. (at writing 163.30s)
GBPJPY losing back 500pips is an indication that the buyers are gone for holiday and there isn’t much to buy. Previous support at 225 came to the rescue and she will need to close above 227 to get any higher. Mid- 229 has now established itself as double top and will need to break below 224 to gain some more. In the coming weeks, we could well see 219, 207 OR the upside will show 234 & buyers are already dreaming of that 240. (at writing 227.40s)
CADJPY one can not expect this pair to be different while all JPY plummeted over night. The question will she surrender 110.00 line and head for 106? Or will oils keep buyers push it towards 116.00 cloud area. (at writing 110.20s)
December 11, 2007
Carry traders were helped by stock buyers as they all anticipate a rate cut from the US…. Well, that is cheaper loans for them to load up more positions before the year ends. The FEDS will have to make a damn good decision tonight because lower interest rate would only encourage more reckless investments and with inflation & unemployment knocking on your door… that will spell Stagflation. Most major currencies are going through rate cuts and that gives the Bank of Japan plenty of reasons not to raise their rate. That is another reason cause behind this imbalance in the world of finance. More banks are coming out of the closet admitting their losses in the Subprime but then we have heard that again and again on the news front. Look at the overall picture and you will see that carry trades against the JPY will not last.
USDJPY is still making higher high on the daily and that is keeping bulls on the right side of the fight. But how will the market reacts to the FEDs decision tonight? Look at the EURJPY & GBPPJY and you will find out. I would rather stay out of this one for now unless you are already in that long on the breakout above 110.50s…. the main fight will be in EURUSD & GBPUSD. Key lines mentioned previously are still valid. (at writing 111.90s)
EURJPY the breakout of the cloud was made and 165 is that higher high needed to keep this bullish run pumping. Look again and you will see that she has yet to close above the cloud, LET SEE if rate decision in New York would make or break this upward momentum. The first sign of weakness is a fall back below 164.00…. but on the other hand, oils is having trouble getting past $90 mark so that would be interesting to see how well the EUR could go across the board. (at writing 164.20s)
GBPJPY still bullish and 229 has been taken and now resting before the next move on the rate decision tonight. Will the market be able to shoot for the cloud bottom at mid-234 or will she test downside pressure at 227? Daily close above mid230 will push higher but failure to stay above 229.00 will be costly…..(at writing 229.30s)
CADJPY is weakening across the board BUT managed to stay above 110.00 thanks to carry trades’ momentum but that could all change tonight. Sell below 110.00 target mid- 106 but a daily close above 111.00 will bring that cloud zone 116s into target. (at writing 110.60s)
December 7, 2007 and the week ahead
The world thinks it is safe to start buying stocks now that they can get cheaper loans in the UK & US….. think again!!! The recovery in both stockmarkets and oils have put carry trades back to the weekly highs. As for Friday, I think the market needs time to digest what had happened in the week, in particular the GBP & JPY before they could make the next move.
USDJPY the topside breakout was a good one and it is now above the Kijun Line for the first time for nearly 2months. Where next? As long as she could stay above 111.00 then 115 is possible to get so buy when you get the opportunity. Remember the market has to keep staying above 111.00 daily close. As for sellers the first sign of USD weakness is a slip back below 110.50 and that bottom 109.50… or wait for the next chance at 115.00 failure (at writing 111.50)
EURJPY higher oils did give the EUR some good support across the board BUT this pair has yet to make its way out of the cloud. My guess is that the next time she does it will be a wild ride all the way to 170 or 150…. So make sure you catch the right money train. Very heavy at 163.80s to 164.20 and expect a lot of support at 161.00. a breakout at either ends will also be well worth the risk so be prepared to reverse your trades at that key lines (at writing 163.40s)
GBPJPY all I ca say is that she has regained her bullishness by closing above 225.40s and the next test is to get over 227.00 as the stepping stone before 229handle. I would say 225-225.50 is now the buying area so I wouldn’t favor any selling unless she falls back below 224.50. (at writing 226.70s)
CADJPY $3 gain overnight is a big percentage move for any commodity or stock index, and thankfully that rescued the CAD bulls for the time being. Daily close below 110.00 will be the first sign of weakness. If the market continues to close above 110.20 then more buyers will join this carry trade. (at writing 110.20s)
December 6, 2007
Carry trades are falling but a stronger USD across the board is holding up the fall.
USDJPY so the breakout above 110.50 took place and that mid-110 is now support. A fall back below this line will spell trouble for USD….. on the other hand buyers will want to test the Kijun Line at least. Sell a daily close below 110.40 or stay on the buying side to see if 111.50 could be broken. (at writing 111.00)
EURJPY sliding badly thanks to a falling EURUSD. The cloud is now 160.50-164 and the market seems comfortable being inside it for now. A slip below mid 160 will kick start the downtrend again and head for 158 but a break back above 163 will see if there is anything left in the buying side. (at writing 161.50s)
GBPJPY 223.70s is the low so far and daily chart don’t look good unless she could close back above the Tenkan Line of 225.40… Daily close above 227.00 will be the key area for buyers to be in control. (at writing 224.40s)
CADJPY still looking weak and a break below 107.80s will push closer to the 106 area. Oils and Gold still falling and without a bottom as yet. Only a daily close above 110.20 will bring back some buyers (at writing 108.90s)
December 5, 2007
Traders are bearish GBP but bullish EUR… where does it leave USD? Don’t forget that the market is expecting a rate cut in USD this month. Would rate cuts encourage traders to ......
USDJPY sellers failed to take out that 109.50 necessary for confirming the downtrend is back on track. And was is a close call? Next move will be to see if she could get out of this 109.50-110.50 range…. I would play for exit at either end and a daily close along that direction would be add value. A reminder that Kijun Line is at 111.50 and a small bottom building at 109.50 with stoploss waiting to be triggered at either end. (at writing 110.30s)
EURJPY Still inside the cloud but getting bullish with higher high & higher low. Sellers came in early at the Kijun Line 163.00 and for now they will have to send it below 161.50 for another shot at 158.50… on the upside, I don’t see any good in staying on the buying side unless she could get above 164. (at writing 162.30s)
GBPJPY so sellers are back in town and have taken out the Tenkan Line… and that 225.50 (previous support) is the new selling area. As for buyers it would not be any good unless they could close above 225.60 and treat today’s fall as false. 227.00 is the other key line to get back its buying power, if not we will see 219 sooner than later. (at writing 224.90s)
CADJPY getting weaker and 111 handle looking farther away as gains in both oils & gold not supporting this pair today. Cant see a rebound unless a nice support could be found at mid-106, below that could bring 102 in before the year ends. (at writing 108.30s)
December 4, 2007 and the week ahead
Stockmarkets are giving back some gain and so too did oils slipping below $89. I cant see carry trades going much higher at these levels. Either oils or Nikkei index have to gain ground before carry trades could be in for some more move up north.
USDJPY mid-111 became too much for buyers to test and Kijun Line is just right above that line. I am sure the market will try to push towards the Kijun Line prior to the announcement of Non-Farm Payroll (Dec 7th). Weakness is shown as she slipped back below 110.50 BUT still need confirmation once she breaks below 109.50. If not its is a buying game YET… need to stay above 111.50 first then 114.00 (at writing 109.70s)
EURJPY losing some more ground like all other JPY pairs. Like I said previously that the market will look for 158.50 is she can not get over 164.00 (cloud top). Let her stay in the cloud for some more days before a direction could be revealed. (at writing 161.05)
GBPJPY 230 seems like a mile away now and it is a potential top… having said that, never forget that a bullish move could run 400pips in 24hrs so there is no rush if you are keen on buying. Below 229.00 was a good sell now let see if Tenkan Line at 225.10s could give a nice bounce!. If below that we could see 219 back into view. The UK’s rate decision on Thursday will give traders something to speculate on. 225.00 is a potential buying area but the market will have to get back to 227.00 quickly to confirm that. (at writing 226.00s)
CADJPY things looking bad again for the CAD as she get sold across the board. the only thing to save her now is bargain buyers in commodity. If not, it will be a down hill move all the way to 102. The only way to get back into the buying side is to stay above 111, where things fell apart recently. (at writing 109.30s)
December 1, 2007 and the week ahead
Carry trades are showing signs of moving away from Oils price movement. That only means stockmarket is the next thing to look for.
USDJPY has regained some loss grounds and is bullish above 110.00…. next place to sell is mid111 or below 110.00. The confirmation of selling game is back on when she breaks below 109.50. If not its is a buying game all the way back to 114.00 (at writing 110.60)
EURJPY is STILL trying to break out of the cloud. To the topside that is BUT facing strong resistance at mid 163-164. if she continues to fail to get over 164.00 and stay over that line then next move should be down to mid-158 which has not been tested since the beginning of Nov 2007. (at writing 163.40)
GBPJPY getting more bullish by the day only thanks to recovery in stockmarkets. The cloud bottom at 230 is where buyers want to be in order to push towards 235 handle. Daily close below 229.00 would let sellers back into the game with 230 potentially a top. (at writing 228.70s)
CADJPY Oils is failing to below $90 and will soon invite buyers to take one last shot at $100 just before the year ends. Technically speaking, buyers got the upper hand as long as they could stay above 111 and only a failure to get back into the cloud at 112.30 would start selling once again. Above mid-112 would bring cloud top 116 into range before players could dream about the 120s again. Below 111 will see 106 into play. (at writing 111.20)
November 26, 2007 and the week ahead
Carry trades got a short break from the selling but that was only because players are reluctant to establish new short positions. So it was profit taking rather than long positions coming back to trade…. They will surely need some good rebound from both Dowjones and Nikkei; neither of which has found a bottom.
USDJPY not out of trouble yet, and like I said previously that you have to allow for profit taking and that will ease on the selling until the next trigger reveals itself. Bigger stoploss is behind that 107.00 gate and I don’t expect the Bank of Japan to take any action just as yet. Why? Look at the price of oils and the only way to offset it is to have a stronger JPY. Sellers will try a move before NPF numbers come out next week… that means buyers will have 10 nervous days to see if 107 line would hold. Until new reasons come up, it is sell a rally and I would expect 109.50-110 to be heavy. (at writing 108.40)
EURJPY holding to that 160 handle but not getting bullish. Maybe she needs oils to be above $100 to help it stay above 160.00; a daily close below this will put a lot of pressure on recent bottom of mid-159 and cloud bottom of mid-158. Will need a good test of 158handle and if a rebound is good then buy above 160…. If not its still a selling game. (at writing 160.80)
GBPJPY nothing new and buyers are trying to get back above 225 where it would be necessary to have a shot of 227. If not then 219 is next direction, then some more long liquidation will bring 207 into view. (at writing 224.00s)
CADJPY Oils is still waiting for another move at $100 and when it fails, carry trades will retreat all the way to sub 100.00…. that is one big call but as long as she is below 110 it is in selling territory. Next support should slow things down is at mid-106 but that will only attract more sellers to attack the magic number 100.00 (at writing 109.80)
November 23, 2007
Thanksgiving holidays is over and it left a big mark on weekly chart. Low liquidity makes it easy for stophunters to do their dirty work. Lower lows on both daily & weekly charts in JPY pairs are not going to favor any buying for now. Let see if nest week would bring those key lines yesterday into view. Nothing extra to add except I don’t think much selling is to be done as traders pack up for the weekend.
USDJPY and we have seen mid-107 printed and that should discourage people to go long. (at writing 107.90)
EURJPY getting a small bounce out of previous high/low area of mid-159 handle…. Buyers are thinking of a bottom building in that area. Think again!!! I would only favor buying side on 2 conditions; 1. a test of mid-158; and 2. should she get back up above 160 after that. 163.00 & 164.40 are key lines for buyers to get back its bullishness, until then the cloud bottom should see how well carry traders are in the game. (at writing 159.90)
GBPJPY she is way outside the cloud and the only way to get back its bullishness is a daily close above 227.00…. maybe too far away to dream of for now….. and maybe in the coming days I will lower this criteria. (at writing 222.00s)
CADJPY still printing lower low on the daily & weekly chart so I would say a move below 109.00 will see 106 handle into play. (at writing 109.40)
November 21, 2007
So the battle between stock market collapses versus a higher commodities (naming Oils & gold) is hitting the carry trades very hard. Stay tune for more sell a rally move!!! Key lows to look for USDJPY 107; EURJPY mid-158; GBPJPY 219; CADJPY 106. Let profit taking plays its part and also bargain hunters…. Then the trend will continue its course once again.
USDJPY the bottom at 109 has been broken and expect that to be first selling point and don’t expect low-108s to be much of a buying area…. Profit taking is what cooling things down to wait for the next trigger…. Maybe another fall in the Dowjones or even Nikkei will do the job. Let see if the remaining days of this week could bring THAT 107 target into view! Don’t see much use in buying this pair at the moment as JPY pairs are mostly liquidating plus USD bashing is going on in the other two majors namely eurusd & gbpusd (at writing 108.60)
EURJPY nothing new to add so just watch her play up and down the cloud range 158.40-163.40. Thanks to higher oils, eurusd made Historical high and it is keeping this EURJPY pair from falling like a rock. I favor a move towards 158s handle to see if she would fall or not. A bounce from that support would favor a move to 164. (at writing 161.10s)
GBPJPY sellers are in control and I don’t think buyers will get back into the game unless they could stay above 227.00… let see if sellers could push towards 218s handle or even 207 (that is outrageous to contemplate… but why not? We have seen 1400pips fall in 40hours). Daily chart is still making lower lows and I would stay away from the buying side until it could establish a bottom. (at writing 223.80)
CADJPY oils up and gold down…. Whats new? Yes oils has made a new high… and maybe that is what buyers are hoping to see!!! But daily chart on this pair is still making lower lows to continue the trend. Support at 111 has been broken and now that she has fallen out of the cloud (112.40) expect more selling to come!!! Only one signal to look for if you are buying; that is a daily close above 114 (at writing 110.00)
November 19, 2007 and the week ahead
The trend is still down and the market awaits the next wave of USD bashing. The only thing keeping carry trades above recent lows is higher oils for the past 3days. Technical selling will take course when the world realizes that easy interest earned overnight against the JPY is no longer a safe bet.
USDJPY daily chart isn’t looking any better despite selling has eased off. Carry traders are playing for a bottom to build at 109.00… but think again. A new bottom would only act as a magnet for sellers to break it. So what will the trigger be next? Daily candles are still making lower highs so the ball game is still in sellers’ control. (at writing 110.20)
EURJPY nothing new to play for as she is stuck inside the cloud (158.40-163.40). 163-163.50 remains heavy and I would not buy unless a break above 164.10… if you are eager to buy then try your luck in mid-158 but if that bottom is broken then we could see 149. That is 900pips out of the cloud…. And above the cloud would see 170 into view (that is 600pips) so why hurry? (at writing 161.60s)
GBPJPY struggling to stay above 226 despite a good move to 228 handle. I still believe 227.00 is the place to be above if you are buying…. And anything below 226 is selling zone. Sellers will play for lower than 218 while buyers will need to break 229 to start dreaming of 240 again. Daily chart is very weak and a break of 223 will break this carry trade and anything below 219 would bring 207 into view. Yes, that is very optimistic and lets see how the coming weeks will play out (at writing 226.20)
CADJPY oils up and gold down…. Whats new? Support of 111.00 will hold the key to further movement south… next target is mid-106. And a daily close above 114.00 will ease off the selling…. But for now she is comfortable in this cloud 112.30-116.20. Gold traders has another 3weeks to make the next move up if not there is only selling to be done as traders pack their bags and head for a long vacation. Sellers will need to break 112.00 will kick start the selling and a break of 111 will speed things up. (at writing 112.90)
November 16, 2007
The trend is down despite good bounces at today’s lows. Daily chart is still printing lower lows so I wouldn’t want to go in and catch a falling knife. Let profit takers & bargain hunters do their share of work then when the time is right for another push we should look at USDJPY for the next fall.
USDJPY nothing new to add…. Just sell a failure to get above 112.40 and breaking 109 will push real fast towards 107 handle. Mid111 to mid 112 will be heavy with more sellers looking for an opportunity to dump the USD at the best price. Will most likely to be stuck in 109.50-111.50 for a few more days until we get some volatility in the stock market once again. (at writing 110.50)
EURJPY when oils fall, the euro loses its shine!!! Faiolure to get over the 164.00 line brought the house down and now we will see how long she will stay in the cloud (163.50-158.50)… only buy above 164.00 and I don’t fancy much of a chance when she tries for recent support of mid-158. (at writing 161.90s)
GBPJPY the only way to get back its buying momentum is to stay above 227…. Until then the risk to the downside is a break of 225.00… daily chart is still weak and I cant see much divergence to help this pair out of a major fall next week. Look to sell rally is the best game for now. Above 227 will test cloud base at 232, so there will be 500pips so there is no hurry to buy under this area. (at writing 226.00)
November 14, 2007
More volatility is in the making so be sure you are not on the wrong side of this storm. The world has more on its plate than it could chew and more things to trade.
USDJPY still sell a rally is preferred but let other majors (eurusd & gbpusd) finished with their move then sellers will come in to send this USDJPY back down. It is not surprising at all that mid 111 did enough to hold down this rally…. The old bottom was at 111.60s and I would dare say that buyers will make another attempt to push towards the 112 handle. Next resistance is at 112.20 (Tenkan Line) and the first sign of weakness will be a SELL below 110.50… confirmation would be to break 109.00!!! only a daily close above 112 could keep sellers away for another day. (at writing 111.00)
EURJPY is looking better than other JPY pairs as she broke above 162.50 (Cloud top). It is bullish so buy a bounce when you get a chance AND only sell when she is back inside the cloud below 162.50….. Another tricky business is that she has failed once to get back above 164 (the old bottom). Failure to get there (AND stay above it) would mean 157.50 is the next likely direction. Things could swing either way…. Only buy above 164.20 and I couldn’t try to catch this falling knife!! (at writing 162.90s)
GBPJPY losing its footing despite a good move over the past 48hrs. gaining 800pips is quite impressive but giving back 200-300 in a few hours is just as impressive. I wonder who is collecting all the pips out there!!! Sell a rally towards 231 is preferred so play it wise. A daily close below 239.00 will spell trouble for the Pound… and with oils & stock market hiccups things could turn the table upside down real fast. I rather stay out of this pair. She has breached the cloud but only to be pushed back by the Kijun Line (232.70)…. It is a sell as long as she is below the cloud!!! (at writing 229.40)
November 13, 2007
Carry traders are in FULL retreat and I don’t need to repeat the reasons why. To add, the tricky observation could be seen is that JPY crosses did a lot of damage and USDJPY sellers are not in full force yet. Give profit taking to do its part and things will get bouncy. When traders are ready to sell more USD then we will see deeper territory than my prediction of 107.00. Forget all those oversold & overbought readings, the volatility we saw the past 8-10days are here to stay.
USDJPY sell a rally is the name of the game for now and any profit taking activities will provide plenty of opportunities to sell some more. Thanks to JPY crosses selling across the board, USDJPY followed suit to print 109.10s and now sellers are looking for a reason to start dumping more USD once again. All of my key cloud lines are too far away to recommend trading from those areas. Next stage to sell is the past year’s low of mid-111 or sell that bottom building at 109.00 (at writing 109.70s)
EURJPY the downside was broken below 164 and falling oils aren’t going to help this pair come back up for now. She is in the cloud and will probably be there for the entire week. Here is the new range to place your bets; 167.50-162.50 and an exit at either end will be handsome to follow. A new wave of USDJPY selling will be the right trigger to help this pair fall, until then short term traders will try to get in on oversold short term charts. They could be fooled!!! (at writing 160.30s)
GBPJPY falling below 237 did more damage than I could imagine. Or maybe I was away from my economic news to follow its movement. Nonetheless, the damage was done to this bull move and losing 1400pips in 2days is a lot for carry traders to get back into this game. Cloud bottom is at 231, maybe too far away for buyers to target so maybe the previous bottom at 228-229 is a better zone to sell. A reminder that the Nikkei index is still printing minus numbers for over 10days now so unless they can recover I doubt it that interest yielding only could bring buyers back into the scene. (at writing 226.80)
CADJPY a reminder that I did call for 114.00 when the market was shooting for the sky at 125s…. so where next? Mid-111 handle has yet to be tested so I favor a SELL. Cloud top at 115 is a testing zone for buyers to get back into the game, if not sell at either end of the range 111.50-115.00 … here are more magic numbers to trade if you missed the ride; 119.00 & 124.00 for upside & 106.50 & 95 for the downside (at writing 114.60)
November 8, 2007
Carry traders in retreat with the help of a falling Dowjones & Nikkei. But only to be met with buyers lifting Oils once again. More banks & investment bodies coming out with more losses from subprime and that should send carry trades running. You can take advantage of buying dips after the stock market has bottomed out for the day AND you can also play the opposite side of the equation by waiting to sell JPY pairs when oils peaked out for the day or two. Either case, take your pips and be happy that you didn’t get stopped out in such high volatility.
USDJPY finding support at 112.00…. just another bottom building and waiting for a new wave of stoploss selling. Look for a failure at 114.00, maybe what the Feds will say tomorrow can spike things up for a new wave of selling. Cloud bottom 115.00 may be too far away so Tenkan Line should be the next center stage of decisive move. I still think 107 is possible (maybe not next week or in November) and only a daily close above 114 could change that. (at writing 113.10s)
EURJPY well the market tested the Kijun Line and it seem to hold up just fine. So look for buying opportunity as long as 164 can keep traders earning extra interest dollars overnight. 164-168 range is yet to be broken and since it has been making lower lows on the daily, I favor a break to the down side. Sell a failure at mi-166 to 167 is preferred to see if 164 can hold another wave of selling. Keep an eye on whether Oils could take to the magic number $100. (at writing 165.80s)
GBPJPY now that she has tried to take out 235 but failed by 40pips…. Things are setting up for good moves. Daily close above 239 will bring 245 into play but falling back below 237 will see 230 in range. (at writing 238.10)
CADJPY has lost the plot and maybe the Bank of Canada’s intervention was effective to drive it down 600pips in the past 24hrs. I am sure most traders are stunned by now AND some may have made plenty of pips!!! Oils still gunning for $100 and so too is Gold shooting for $900… but carry traders may have deserted this pair already. Sell a failure at 124 where things fell apart previously. I don’t see much in buying dips for now. (at writing 121.60)
November 7, 2007 and the week ahead
Read my reports previously:
There is two things trading for at the moment and whichever wins out the battle will set the trend for months to come!! 1. stock market collapses thanks to more bad numbers numbers coming from Subprime; 2. commodities movement led by OILS (currently $98) and Gold ($845) …. Either side of the equations will give traders more volatility to play.
USDJPY digging deeper as traders dump the USD across the board. Maybe you should heed Erik’s warning that the USD is losing 0.5% daily… look closer at most major pairs against the USD you will find 50-150 pips daily…. The biggest mover was USDCAD the past 24hrs. Technical speaking, she has failed to get back into the cloud at 115.00 and has lost the bottom recently at 114.00…. meaning 111handle is next point to see if there is a bottom. In the meantime Subprime losses at another major bank is sending carry trades running so lookout!!! Things could get nasty and I will say 107 is not hard to get… there will be pauses for profit takings. (at writing 112.90s)
EURJPY she has proven that 168 is a hard target to get despite OILS pumping a higher high and only $2 away from that magic $100. Stay with the 164-168 range until a break is clear. Oils is still sky high so this should limit any fall in this pair. Kijun Line is clearly FLAT at 164.00 so that will be the key line for this uptrend to bounce or retreat all the way down to 150s handle. (at writing 166.20s)
GBPJPY following suit as JPY pairs got hit badly across the board. where to trade next? I will stay with 235-245… but for now sell a rally starting at 238.00 & 239.00 BUT if she could close above 239.00 then carry traders will be back for more upside move. The only place to buy is 235 (with tight stop…. maybe 40pips) or later at 230. Currently she is trying to build a bottom at 237.00 BUT I DON’T THINK SO. (at writing 237.70)
CADJPY still supported by oils & gold… and people are running to these commodities thanks to a weakening USD. Maybe one day speculators will realize that there is nothing else to buy so they might as well take their profit. 124 has been taken so I don’t see any resistance until 128 handle…. That is IF she could continue to stay above this 124.00. A reminder that negative divergence is building so sell at failure at 127.00s isn’t so bad!!! Stock market jitters will provide plenty of opportunities for pullbacks so people will get back into the carry trades. (at writing 124.10)
November 5, 2007 and the week ahead
Just a summary for those trading JPY:
- Subprime Mortgage Losses: more banks coming out to admit their losses and so far we have barely touched the tip of the iceberg. All we need is another BIG bank to rollover into insolvency to get Stock markets worldwide collapsing.
- Stock markets (namely Dowjones & Nikkei) have tried to get back to its highs but so far has given big players the chance to sell their positions at the highest possible points. It is a bull trend or bear trend? I’ll let you decide!!! As long as these markets moves 100points up or down, expect GBPJPY to follow suit.
- OILS, yes buyers are still kings for the moment as they have that $100 on their mind. All I can say here is that it is not a matter of supply not meeting demands here but rather those speculators buying and buying some more to reach for the moon. As long as oils keep going northward we will see falls in JPY pairs to be limited
- GOLD, yes it has taken out $800 mark. Where next? Will profit taking bring the commodities pairs down? Look out for USDCAD, AUDUSD, NZDUSD & EURCAD to move more that those traditional “majors”. USDCAD has taken all time low, meaning it has dropped 7000pips since 2003 = 40% in value!!! I can’t see any good for the Canadian economy in 3-6months.
- Interest rates!!! Last week’s event in Japan means NOTHING. On Thursday the BOJ said “weak economic growth & CPI of 0.01% can not allow them to raise rates”, but then on Friday “we currently have strong growth & is positive about 2008 so we will have to raise rates accordingly”…. Can anyone understand what these guys are saying? All I can say is: they are CLUELESS when it comes to inflation indications!!!! Next week, we will see the European currencies will have their say; so will EURJPY & GBPJPY shoot for 168 & 245 respectively? Or will they fall to 162 & 230 respectively?
- Who to blame? Blame it on cheap YEN since traders worldwide can borrow trillions of dollars in JPY to trade and why not also blame the Chinese YUAN for fixing their currency so low that keeps their good attractive (40% cheaper than others in terms of foreign exchange only). These two factors alone are creating a massive imbalance in the world economy…. The end product of such disastrous actions is people will keep buying and buying some more, which ultimately drives up JPY pairs, OILS & commodities!!!
Technicals
USDJPY still going nowhere despite an attempt to stay above mid-115 failed. Two key lines to trade; 115.50 & 114.00 and a daily close to take out either ends will determine the next move. Upper resistance will be 117.00 cloud top, lower support will not come in until mid-111. To make matters difficult to trade, oils above $95 will keep any fall limited & stock market hick-ups will still the show in JPY pairs. (at writing 114.80s)
EURJPY early sellers before mid-167 did some damage but buyers have yet to give up 165 line. I think my 164-168 range is safe for another week. Do not sell above 168 nor Buy below 164. A daily close below 165 will send the pair all the way down to 162, then 159….. but a daily close above 167.50s will keep carry traders’ dream of 170 mark alive. (at writing 166.70s)
GBPJPY mid 241 was the key resistance and I can not say anymore than the market has shown itself!!! Look for support at 235 to hold before buying again or consider buying a breakout above 241.50 with target 245. For now higher oils (condition #1) is keeping things up…. On the other hand pull back in stock markets (condition #2) will try to send things lower; below 235 will be 230 & 228. Next week, will she aim for 245 first or 235 or both? (at writing 239.90)
CADJPY has now taken $96 & gold above $800 and traders are dreaming of that magic number at $100 & $1000 respectively!!! Can the world economies honestly sustain on these prices? I don’t think so!!! However, Yes there will always be buyers but somewhere down the line reality will have to come in and they have to admit that speculative buying only can not be justified!!! Next resistance at 124 still holds and sell a failure there looks good. Above 124.40 will test extension to 128. daily close below 121 will be the confirmation that the bullish run is over. (at writing 123.90)ually it will eat into your pocket and your asset will lose value just like the falling USD and GBP.
Be warned that the BOJ will be forced to raise rates, meaning the cost of borrowing YEN will double and will rise by multiples of x2 since their rates are currently pathetically low at 0,5%. Translating to further losses in JPY pairs. Don’t ask me which bank is to fall next, just hope that the smaller one around your street could survive. Brace yourself for another wild ride and I would favor the JPY to dig deeper in those so called carry trades.
USDJPY is the only thing holding back this domino collapse of the carry trades. But only thanks to a recovering US dollar across the board, most investment houses will tell you “due to a pulling back on the commodity markets”. Here, we tell you it’s not over yet “and the yen pairs will swing wildly to find lower lows. Stay out of buying until she could get back above 109.70 (target 114) and watch for another wave southbound if 105 could be broken (target sub 90 area). At writing 107s.
EURJPY falling as hard as she can thanks to 1. Oils retreat 2 eurusd losing its bullish head 3. Stock market getting another wave of better sellers 4. Carry traders losing their short pants across the board 5 higher eur could easily break up the EU because smaller nations cannot cope with EUR at current levels above 1.4000 I would favor eurjpy to bounce of the 147-148s support net then dive further in to the 136 for better support. Northbound moves are unlikely but it does not deter buyers from dreaming of 170 level. Good luck! (at writing 152)
GBPJPY just bad economics!! She has to break 180.00 levels before I study my history books again. Our regular readers will remember this quote “below 192 is 180 and 160 is even possible”. Stay tuned for further losses as far as 164. (at writing 189.80)
Aug 7 and the weeks ahead….
Just when the USDJPY broke above 108 to signal a recovery, the bottom in eurusd & gbpusd gave way. Have we all noticed this correlation? Hope you all did. Keep buying the USD for another 200-300pips and see when the big bears will be out to play. “Horray!”! carry trades are back in play. Enjoy it while you can because the truth about Japanese interest rates will come out in the later half of the year to send Yen loans bankrupt once again. The world might be partying now despite the fact that prices of basic commodities like “milk, eggs, gas” have increased by more than 20% in the past 3months. And many fishery businesses are going broke because they can not afford the current price of gas. This will all mean “INFLATION” and not the usual lie that the BOJ tells you. I am sure that the BOJ would want to devalue their currency to get an advantage in the export market. BUT at the cost of fundamental economics will prove costly to the world in the future.
USDJPY It is all looking positive for the USD now, stay out of the selling if you can and see how the potential top at 111 would play out. I would think 114 is better resistance to sell. Stay with my previous comments: “Future target would be 111 or 114 as long as the supporting net at 103 could hold the pressure. Below that will spell disaster and possibly sub 90.00 would be the game plan before we see any major recovery.” (at writing 109.40s)
EURJPY new high was registered at 169.95…. and I smell an Option Rat defending that 170.00 barrier. This will be interesting to see how many players will be tempted to take out this barrier and lift a new historical high. One caution; please not that every move to new high has cost the EUR bulls 200-300pips drop. Call it “profit taking” or whatever, but it is sufficient to gather late comers to this cartry trade. Stay out of the selling side unless 166.00 handle is broken, your confirmation is to close below 165.00 on daily. (at writing 168.65)
GBPJPY this carry trade is not finding direction on its own but nonetheless has benefited most from every bullish move in the eurjpy or usdjpy in the past 2weeks. Buy a bounce towards mid-209-210 is preferred and stay out of selling side unless 208 is once again broken; target sub-200 areas and possible to drive beeper below 180s because the UK economy is not out of trouble yet. at writing 213.00)
July 18, 2008 and the doomed months ahead
If you think it is safe to go bargain hunting again well think again!!! Dowjones has broken to new low & Japan’ Nikkei Index is not too far behind either. What to expect of the USD in the coming weeks? Just more rounds of SELLING. Yes, expect more players to join the band wagon when the EURUSD takes to higher high (above 1.6050) and so too will Oils & Gold to keep the THREE nails in the coffin tight. All we need is a vibrant YEN to kick start more bad news for the USD. So Fanny Mae & Freddie Mac is getting all the help from the US Govt…. that’s no big news if you have been following our comments going back to Nov 2007. The investment world is going sour and the FED is pumping more monopoly moneys into the markets nice there is no tomorrow. That means the taxpayers’ tomorrow is all in DEBT.
Goods and services in Japan is going higher and the BOJ still not accepting the reality of inflationary pressures. Meanwhile, suppliers are marking their goods (some as much as 30% as a “one off incident”) to cover their skin… all at the expenses of the consumer!!! BUT who is to care while we all believe in the ultra low interest policy of the BOJ to provide an advantage for their EXPORT market. Think again fellows, the US is thinking of doing the same to even the pendulum…and what a better way to do it is to cut their rate all the way from the high of 5.25% to 2%... I dare to say that there is more cuts to come…
Technical signals. More ranging to come unless a break at either end to make a push.
USDJPY the market is getting plenty of selling thanks to bad movements stock markets worldwide and investors’ loss of appetite for the USD. Lets see if the net 103-105 could provide some nice rounds of buying for late comers. Buy dips with caution and definitely stay out if she falls below 103.00… why? Carry trades are out of the game yet as long as she stays above the Ichimoku Cloud. Future target would be 111 or 114 as long as the supporting net at 103 could hold the pressure. Below that will spell disaster and possibly sub 90.00 would be the game plan before we see any major recovery. (at writing 105.40s)
EURJPY new high was met with heavy selling & proved expensive for late buyers. But don’t lose heart just as yet because my crystal ball can foresee a renewed move towards the 170 barrier…. and possibly the springboard for faster climb northbound. I think profit taking is over and players are waiting for the next drive into history books. Three conditions are necessary; a stronger EURUSD to claim historical highs, oils to continue making gains above $150/barrel and collapses in the stock market could be recovered quickly. Strong support at mid-164 and anything below that will reverse my position to a SELL>>> target 147, And iam pretty sure that the European banks will prefer a weaker Euro at sub 140.00 levels to balance their Current Accounts with the Asian Export markets…. But then again sub-140.00 levels could be 1-2years away. (at writing 167.55)
GBPJPY Still finding good support at 209 so don’t hurry back into the market yet and look for that second round of selling to see is 209 or even 206 could provide good bounces for some good buying. Until then sell at 214 or sub 205.60s…. anywhere else are no-man’s land and any stoploss will be hunted down by big players. I still see future weakness in the Pound but as long as either the usdjpy or eurjpy are shining, this gbpjpy still commands the best position to buy as a carry trader. (at writing 211.40)
July 8, 2008 and the weeks ahead
12months since the world was hit by that Subprime bombshell….. what is new about that? Well, everyone is still telling you that things are FINE and lets partying again….that’s what most banks told you in July 2007 and look at what has happened to their stock values by February 2008!!! I wonder when the next wake up call is due???? WARNING: inflation in Japan is very high and unlike other eveloped economies with 2-8% p.a. … Japan’s 4% (factual or estimate) it will be the biggest in a decade and how will the BOJ deal with it? I am positive that they will raise it above 5% in no time. Prices of food & raw materials has all jumped sky high (we all know that) and so too is inflation in China from whom the Japanese consumers rely on so heavily. Both these factors are enough to drive prices of nearly everything in Japan at a rate that politicians & mathematicians at the BOJ can no longer lie about it and give you that “deflationary pressure blah blah blah”. G8 Summit is just another round of “Drinks on me!! Says the rich boys” while the world continues to succumbs to higher inflation and no clue of where the financial worries are going to end… so don’t expect any good directional movement out of this one.
USDJPY hitting a brick wall at mid-108 and not giving up YET. Possible to test 111 before any major fall back. Like I said previously that 103-105 now acts as a net for late comers and keep the bull ride steady. Stay out if she falls below 103 and until that happens, I would only suggest buy any pullback of 160pips. (at writing 107.00s)
EURJPY while the world focuses on EURUSD to aim for its new high but did anyone noticed EURJPY printing new high? YES, an all time high was printed BUT not without a cost. Big boys have already booked their profit and will wait for the next drive into history books….. it won’t be long before we see 170 handle. Buying a pullback is recommended but pay attention to how much ground she loses after making every new high. OILS will be bullish again looking for that $150/barrel so that should be enough momentum for this pair to book new highs…. The only question is when will other factors come into play to bring down this carry trade. (at writing 168.30s)
GBPJPY following gains from usdjpy & eurjpy as mentioned previously and I am not a fan of selling for the time being. Two conditions to look for in a buy, support at 209 & again at 206….. and the next move must be able to break 214 to keep riding for another few months. On the opposite, Sell at 214 (very risky) or below 209 for possible weakness and this move will need to break below 205 quickly to re-establish its downtrend. I see possible negative divergence and will need GBPUSD to break below 1.9500 if you want to sell the Pound. (at writing 211.00)
EURJPY 170 is the top to beat and that won’t too long away. Very bullish on this pair as long as OILS make higher high… even by a small margin AND as long as 159.00 support is not broken. I would rather be bullish euro at this stage and let’s see which pair (EURUSD or EURJPY) will make historical high first. As for sellers, I recommend to stay away for awhile unless 159 is broken truly, (at writing 167.80)