Thinking about USD/JPY

Seems it won’t go lower then 79.7500 without japanese intervention, right now it is about 80.70.

Thinking about putting purchase on it between 80.00 - 80.60, it might be at -60-100 pip loss at first but it seems like the value {at least for short term} is going to sky rocket.

What do you think, is this a potentially good trade?

I too have been buying uj. Even if intervention fails I should still get paid off with the spike.

SOLD! at 81.157 …

about +57 pips.

‘Japanese investor purchases usd/jpy’ sending it sky high in 15 minutes.

Hopefully some of you purchased usd/jpy also!

I like a sell on it right now.
sell 81.370 target 80.790

The Swiss CB tried the same thing, didn’t work for them.
The RR is probably there but you just can’t tell in this market. THE US wants to devalue and so do the Japanese and the EU and the Swiss. Who wins?

Well just for interest sake here is what I’d be doing:

Long 2 lots at the DAILY CLOSE tonight IF RSI(14) closes above 30. Initial stop would be at 80.398 (nice price i.e. further away enough from 81.000) i.e. the previous low swing point (fractal). First target would be 50% of risk. Once the first target has been reached your stop is moved to BE on the ENTIRE REMAINDER of the position (see my notes on my blog). Second target would be when RSI CLOSES below 70 after previously exeeding 70. It’s based on this ‘neat’ little system here:

Technical Trading Systems: RSI Rollercoaster

Obviously: you need to calculate your risk at 2% on the ENTIRE position when opening the trade.

Just my ‘two cents’. This particular pair is CURRENTLY great for this (type of) system given it’s previous long downtrend (which may or may not be over yet). We all know how I feel about trading forex BUT this is one of those ‘primo’ signals for this system (USD/CHF was another not too long ago).

Regards,

Dale.



go long even though it’s been in a downtrend? Well like you say, it may or may not be over.

One thing I notice. The last time it was at this price was in 1994 and look what happened then.

here is my current daily chart. Where is price right now? At the top of it’s daily range. If you had to guess. What would you guess tomorrow’s price bar will look like? I’m willing to bet that sometime tomorrow price will be lower than it is right now. Another thing that makes this look like a good short is that it is at the top of it’s weekly range also. But I’m only looking at this as a one day trade.

of course… I could be wrong… I was once… no wait, that was someone else.
:stuck_out_tongue:


The intervention in the market by the BoJ is far from certain and the picture is even more complicated after the G20 finance talks.

Another one to watch is the Nikkei 8,800 level, if that goes they could be tempted to hit the button especially if it’s combined with overall strengthening Yen.

Unlike the Swiss interventions of recent times the BoJ have been a bit of a one hit wonder making their policy unclear, even though they do a lot of talking.

Personally I am still short USD/JPY from the last time on a long term trade from 85.70, SL at 83 now.

Hello,

Well: I guess this is just one of the many reasons why this business can be exciting i.e. we can all look at the charts and come up with at LEAST two possible but opposing outcomes!!! LOL!!!

One thing that I’ve noticed now that I’ve looked at this pair: I seem to recall that in the not TOO distant past USD/JPY was correlated (to a degree) with equities (well the indices anyway) but I see they’re travelling in opposite directions. This begs the question: what if we see a major correction (or worse still the ‘double bottom’ that everybody is talking about)??? What would happen to this pair???

Regards,

Dale.

I’d tend to agree with you about being wary of a long trade. So long as Ben continues to fire up the ink jets and US yields continue to drop I don’t think we’ll see much of a reversal in this pair. BOJ will probably wait and see what sort of effect QE2 has on the Yen rate before doing anything. Besides, if you’re going to intervene it’ll cost less political capital to do it shortly after the US conducts what is indirectly a massive currency intervention. Having said that we might get some hedging of bets between now and QE2 day (which is what today was probably about).

Ok, so maybe someone would “kindly” enlighten me…:o.

The BOJ intervention is supposed to stop/slow down the yen from gaining value…yes/no? So that would result in [U]the pair[/U] rising…?

So without the intervention wouldn’t [U]the pair[/U] tend to go lower…possibly lower than 79.75?

:confused:

my opinion, add in the ‘human factor’ … I will be buying strong at 79.75-80.25 knowing of the turn-a-round to come.

& it all depends on the U.S. in the coming weeks.

Yes it all depends…lol…but my confusion in my understanding of how it works is mostly in how you worded that sentence… and thinking that instead it should be stated like…

“[B]Seems it won’t go lower than 79.75 [U]with[/U] japanese intervention[/B]” …because with [U][B]without[/B][/U] it, it could go lower.

:confused:

The Japanese could invest in the U.S. dollar?

Ok, let me put your statement into a question…

Why without japanese intervention would it seem it won’t go lower than 79.75?

Yup. As US printing presses continue to roll and the UST yields drop this pair will fall from the combination of the dollar depreciation and Japanese investors hunting for yield elsewhere. The only things slowing the decline at the moment, in my opinion, are the threat of intervention and the fact that we’re near some 15 year lows. If BoJ intervenes at around the 79.75 level and the other factors don’t change post-QE2 it’ll be a great opportunity to get short again.

There’s no guarantee they will intervene at that level though. Retail traders were betting for intervention at 82.80 (after the first one retraced) and then again 81.20 and it never materialised. Companies such as Toyota have begun to use 80.00 as their accounting rate going forward which shows perhaps a sign of acceptance - guess they aren’t expecting the govt. to push the boat out much more on intervention. Japanese officials have expressed the opinion that a decline is not so bad so long as it’s orderly and they’ll want to study the effects before deciding what to do. They’ll keep jawboning about the threat of intervention to try and stem the tide but the fact is that the last intervention cost ~$20bn (if I remember right) and it bought them only 3 weeks breathing space. US and it’s QE2 drive to fake pump the stock markets has been distorting the marketplace for a while now and until there’s more clarity over that I don’t expect any action from the Japanese. Also, I’m not seeing any great clamour like with the last round of intervention which was probably more likely down to Kan bowing to political pressure during a leadership race. Which means it’ll probably explode up tonight and I’ll be forced to come back to this thread tomorrow with my tail firmly between my legs :rolleyes:

Because the USD {in my opinion} won’t be aloud to become that weak.

This is all ‘theory’, if there was any fact to this … then it couldn’t exist.

I am brand new to this but have picked up on it fast, Weak dollar is great for exporting {other countries can afford more & cost less to low interest rates}.

For example, If Australia exported $100,000 usd worth of products to me a year or two ago, they would make 112359.55 AUD {.89 exchange rate}.

but now, $100,000 usd is worth only 102,000-104,000 AUD so the same exporters are receiving about 10,000 less for the same product.

Add to it the higher interest rate, only a matter of time before prices rise … AKA inflation.

reverse that for the us. exporters are making more now compared to before, so it is just a rubber-band effect.

This is all in theory and strictly my opinion on how it works.

As soon as the usd/jpy drops below 80.25, I am watching it like a hawk & going to buy many lots with a stop loss of 50-60 pips.

So you’re saying that the BOJ doesn’t need to intervene to keep it from going lower? That it won’t go any lower because it just won’t be “allowed” to, or other fundamental factors will effectively keep it from going lower instead?

I am purely guessing that it won’t go any lower because, or much lower, because plan and simple ‘to much money to be lost and gained’.

who knows long term, this is also based off of simple research for scalping, I have made about 60-70 pips with usd/jpy since Sunday night, and I plan on making more in the short term.

One thing I learned about currency that isn’t true about stocks, etc. A currency will never go to zero.

Hello everyone,

I sure hope nobody minds me detailing this trade here and passing comment as I go along. I find this type of thread fascinating i.e. everyone detailing SPECIFICS on a PARTICULAR instrument. We should do this more often really (who knows: it may even restore my faith in trading forex pairs)!!! LOL!!!

Well first let me say this: after reading all of the posts overnight it’s clearer to me than ever just WHY I myself cannot rely on my understanding of fundamentals and simply have to follow something technical. While all of the opinions expressed apparantely make utter sense: I’d be at a total loss (no pun intended). This is something that I’ve always wondered about i.e. one would THINK that, especially in a case like this, there would be 100% agreement on the fundamentals but not so. Obviously: I respect everybody’s opinion but I just simply could not act upon them.

So let’s see how I WOULD ‘play’ this (I say ‘WOULD’ because I’m just paper trading this trade BUT I’m AM long the US Dollar Index live BUT using the Swing Index System and not the RSI Rollercoaster):

  • Long at the close last night at 81.420

A note: it is important with this system be around RIGHT AT the close of the day by the way i.e. you enter at market at the daily close. At the time of typing this message the pair has already moved 30.8 pips and it would therfore be too late to enter i.e. if your first target is reached these ‘missed’ pips bring your BE stop too close to price and you will probably be stopped out at BE because of this.

  • Initial stop at 80.398

  • Risk is therefore 102.2 pips

  • Initial target, 50% of position, at 81.931 (50% of risk + opening price)

Regards,

Dale.