Quote:
Originally Posted by stucros
‘If you look very closely, you will actually see that it is buying of the yen crosses that is leading USD/JPY higher’
mmmm interesting conclusion Kathy. So you are telling us that as usd rallies against the yen but falls against the eur and the eurjpy cross has moved upwards? Oh and I was thinking it might be possible to arb the 3 pairs with no one realising.
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I'm not sure what the gripe is here. She's not making a forecasts, just pointing out what's happening.
What she was saying in that quote is the primary trading volume is in the crosses. As hard as it may be to believe, not every forex trade involves the USD. When the buyers start piling in to EUR/JPY, for example, they increase the value of the EUR, decrease JPY, or both. Depending on how other things are playing out, that could either push EUR/USD up, push USD/JPY up, or some combination of the two. It's the last of those scenarios which can create an increase in the USD against the JPY in conjuction with a fall in the USD vs the EUR.
I certainly have no problem questioning someone's ability to call the market, but at least challenge them on that basis, not on a simple statement of order flows.