Crazy stuff… New all time lows for both, and not in small fashion. BAD BAD news on the reactor apparently.
A 230 pip one hour down candle on the UJ? Wow…
The Swissy one hour was a measly 160 pips…
Something similar just happened on the EUR/USD 5 minute chart…
First it went 75 pips up on one candle and the next 5 minute candle it went 47 pips down. And it’s still moving up and down, trading now seems like russian roulette to me.
Enjoying it on the GBPJPY…
Wow your not kidding just opened up my trading platform and CAD/JPY down almost 300pips comming back now but dang. Dont see nothing new on the news to do that though
it’s happening again… just made 100 pips in 2 seconds, no kidding. And could have been a hell of a lot more if I wasn’t trigger happy. This was in EUR/USD, it just went down massively and still seems to be going. But USD/JPN is going up like crazy.
Must be that G7 emergency call
Update: So yeah, it was indeed just that
Yep to bad I missed that trade (was out to dinner) but I am short now hopfully it will do what I see alot of news events this big do spike then retrace pretty much where they started. So far I am up 20 pips and counting another 20 pips I will move stop loss to break even so we will see
If you are short U/J, you’re playing with fire.
This is an all out assault on the high value of the yen.
They want it down, and down a long ways.
Don’t know if they will get it all tonight.
They have been announcing they will intervene, and they did. And the G7 members have promised to help it along. I’m up a small dump truck full of pips at the moment, and there’s more coming:D
Not very often in FX that you get a warning as to what will happen.
It’s an early christmas present.
I think there was method to the madness though. I think they wanted as many traders as they could get on the bandwagon to help it along.
I agree. I went long just before the spike at 79.4 and got out at 81.4. that was some very nice pips. Like Master_Tang said, the japanese economy runs on exports for a large part, and that requires a weak yen (so foreign investors can get more for their money)- therefore, in the same manner that they intervened to bring it back up, they are going to do all they can to stop it strengthening again, and if possible take the rate higher to help with the losses. it has been holding at ~81.3-81.5 for now, and i would not be suprised by more bullishness. too bad it is friday. i wont be entering again until monday because of the uncertainty.
I think you guys are right this time. However I let the trade go for a while and did pick up 30 or so pips to bad I missed the spike in the first place.
I don’t think it’s a wise idea to trade JPY nowadays unless you’re an expert.
To me, this is gambling rather than trading. I am just not trading this week, I only take high probability trades and that is not possible to predict reliably this week, as any news announcement can have an unpredictable impact on a trade. I look at the year’s results and this week does not give me any reassurance that the probability is with me the way it would normally be. I always trade the chart, trade what that tells me, and this week is all very exciting, with its big moves in minutes, but it is not the sort of week that fits with a sensible long-term strategy. Short USD/JPY, as Tang said, is a gamble, that is not pro trading. So I am not saying don’t do it, but I am saying that it is at odds with the sort of long-term, high reward, low risk strategy that is normally pushed on this site. This week is like a holiday from regular trading. So enjoy the excitement, anyone who wants to trade these moves, but I would not count them towards the year’s overall results as, compared with the results of a regular strategy, any big gains made in this market are a fluke.
Sorry to be a grumpy old man about it, but this week’s events are a bubble outside the reality of genuine long-term trading. I’m enjoying a week off just watching the madness!
ST
as you say, this week (and probably next) are a bubble outside reality, but i think it would be wrong not to follow it closely? afterall, there are some serious issues being banged out at the moment, and that could lead to new long term trends and/or reversal of current trends.
Oh absolutely, as I said I am watching it all, very closely, as you are quite right this could well set the tone for the next few weeks’ trading and potentially the longer-term trend beyond that. All I am saying is that I am not backing my observations with money. I see this as a massive learning week, a flat trading week. Preservation of capital is one of the key tenets of any successful trading strategy, in my opinion, and that is too tricky to achieve reliably in the current climate for me to want to be in the market.
Sitting here watching the latest attempts to get the yen to fall a bit fail, has left me questioning the overall integrity of the current dollar situation.
We are dealing with PAIRS of currencies. But by and large, they are interconnected. All speculators aside, they will never get the yen to fall, as long as the dollar is falling. Oil jumped up today, the buck falls.
The buck falls, the yen goes up. Simple as that.
Which leaves me with a more important question. Think about the euro. It is counted multiple times against the dollar index based on the countries it represented in the original basket of currencies.
I think it’s high time that setup was reevaluated. Given the nature of the current economic situation in the eurozone, why should it count so many times?
Think about it. Where would the Greek drachma’s value be currently? Or Spain’s peso? I could go on. Those countries are in dire straights, yet the currency rides high based on the backs of Germany. For that matter, where would the mark be? Or the lira? Or Franc’s franc?
It would be very interesting to know where the dollar index would be currently based on the old system. My guess is it would be MUCH higher.
I think they should reevaluated the way the euro is counted against the buck, by the amount of total GDP each country represent in the EZ.
Any thoughts?
When do you think yen crosses (eg gbp/jpy, usd/jpy) will return to their more “normal” trading patterns?
I believe the original value of the Euro was taken from the ECU which itself was the basket of currencies whose value was an average of the value of the currencies it represented. The Euros current value is determined by market forces so I dont think it is really correct to say it is measured multiple times against the dollar
Yep - I think it’s just that the market is currently over-valuing the Euro which is causing the disconnect given it’s weighting in the overall DXY index. But The Bernank sure is happy no doubt given that one of the Fed’s goals in the QE programmes was to weaken the dollar. Not sure the average American taxpayer is loving it much though what with inflation for their everyday items taking off quite a bit (far more than the CPI would suggest) and seeing their wealth being eroded in general. QE3 making an appearance or not will be the next decider of where it goes I guess.
isn’t the GDP of California about the same as Spains? what sort of reevaluation are you looking for, or is paying for everything in dollars not enough of an advantage for you these days? lol
There IS no advantage to the dollar these days.
It’s weakness is becoming quite apparent.
And California’s GDP is higher than Spain, but since it’s not a sovereign economy, it’s a drag on the dollar value, not an asset.
Which is what the point was.
There are no evident penalties on the euro for economies that are dragging it down. Trichet mentions raising rates because of inflation, and up she goes.
It will be most interesting to see what transpires Wednesday in Portugal. It’s do or die time. They are already talking about the government being toppled. If it goes, how long do you think it will take before Greece goes?
We’ll see how strong the resolve is in the EU shortly.
Yeah I think traders are wilfully ignoring the EZ problems. Or maybe they’re stacking the problems against the efforts of the Fed to debase the dollar (plus all the problems the US has also), pinching their noses and going with the least worst option out of the two.
Interest rate expectations are certainly playing a big part in the recent rise but you have to wonder how hawkish the ECB really can be without gutting the debt-ridden periphery. They can probably do a 25bps hike in April to buff their inflation fighting credentials without there being too much of an effect but if they go for much more after that it’s not going to be pretty.
Portugal are in a bad way. They’re in the same zone that forced both Greece and then Ireland to take bailouts with yields of +7% and they’ve been in that zone for longer than than both Greece and Ireland were before taking their bailouts. Governments can fall but it’s who’s waiting in the wings that’ll determine if that’s an issue or not. Our government here in Ireland fell over the whole mess but the crowd that came in aren’t exactly all that different to the crowd that went out. I can’t say I know what the deal is in Portugal to be honest. But they can be just about covered with a bailout if needs be. It’s what happens when the bond vigilantes go after Spain that’s the real problem. There’ll be no bailout money left at that stage and that’ll be the real test of the EU resolve. I’m not sure that the smoke and mirrors attempts of the EU/ECB to make things seem alright will work anymore at that stage. Something has to give in the Euro soon enough but I’ve been thinking that for a while now so what do I know!