Anyone want to analyse the GBP/JPY?
I have been following babypips with interest for some time but this is my first post. Well done babypips for such an informative website:) .
Hi Pipschick - I’m holding a large long from the 200 area. I may be wrong, but I think that we’ll see a huge breakout North with no looking back over the next 24hrs due to results from the G7 meeting. From their (G7) statements I believe Central Banks are going to intervene in the currency market tonight with the sole intention of starting a strong Dollar rally.
I’ve looked at the head and sholders formation, but the close of Friday was showing a bear triangle which should have, but didn’t materialise in a further drop South before close on the last 4hr candle.
I think USD/JPY will retest and break +102ish again, bringing GBP/JPY with it rapidly. It would be nice to see +205 by close Tuesday:D
I am sure all technicals will go out the window this week as the Central Banks play with the market - (BUT of course I could be wrong!
)
I will try and post a chart later.
I agree, anything can definately happen with all of the fundamentals. Technically the charts say down but we all know the fundi’s rule!!!
So we need to find a long entry also just in case the fundi’s take this north.
Technically it obvious where we could sell the g/j but as shakesfx mentioned, a lot depends on the G7 meeting. Im thinking a violation of the 1 hr right shoulder may be a good buy area.
Seems to be lining up for a swift move north…
On the daily I see a bear flag where the break of the Lo coupled with the H/S on the 4 hr and the 1 hr could take it down. But on the flip side, the last two daily candles have formed a double bottom. I suspect tonights open will give us a better idea. Let me take a better look at the weekly chart too.
I agree, I think we’ll hit the right shoulder, retrace towards 199ish first and then North. Your entry point looks like good. I expect a bit of volitility later. I will be watching this tonight as I have a lot at stake…:eek: We’ll see how it develops…We could smash through the right shoulder very quickly :), in which case +205 is within sight by Tuesday. BUT - it could just drop through the floor tonight:eek: :eek: so that traders can test where the Centrals Banks will jump in…, but jump in they will.
What I see on the weekly chart are continuous bear flags but there again, it is a weekly chart and can go North quite a ways before the bear flag is violated. I usually do my analysis by keeping in mind the larger time frame charts but basically trade off of the 1 hr and even the 15.
I think GBY/JPY is going to rally starting in the next 12hrs.
I think your techs are spot on, but G7 will disrupt the whole lot and many traders are going to be caught on the wrong side of the market. (Just found out that a huge Options barrier is being defended just below the USD/JPY Friday low too.)
For once I’m going to stay long on GBY/JPY and try and ride the rally (not that I’m being greedy!
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If I’m wrong I’ll come back later and eat some humble pie…:o
Heres a statement and chart I discovered somewhere else and thought I’d share - this is another reason why I think we’ll see a huge rally soon… The chart at the bottom makes interesting viewing…
G7 Statement: Sharper Stance on Currencies
The G7 Statement from the meeting of Finance Ministers and Central Bankers were released on Friday and judging from the language, the attendees are worried about growth, the problems in the financial markets AND the fluctuations in currencies.
When the currency markets reopen on Sunday night, they may take this to mean that the concern of the G could compel COORDINATED ACTION
The Finance Ministers and Central Bankers are pretty serious about tackling the problems plaguing the global economy and I wonder if they are planning a BIG announcement. When was the last time that the G7 invited 10 major banks to Washington to discuss ways to avert a financial crisis?
There are TWO new sentences in the paragraph referencing exchange rate fluctuations
APRIL STATEMENT:
�We reaffirm our shared interest in a strong and stable international financial system. Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability. We continue to monitor exchange markets closely, and cooperate as appropriate. We welcome China’s decision to increase the flexibility of its currency, but in view of its rising current account surplus and domestic inflation, we encourage accelerated appreciation of its
effective exchange rate.�
FEBRUARY STATEMENT:
�We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely, and cooperate as appropriate. We welcome China’s decision to increase the flexibility of its currency, but in view of its rising current account surplus and domestic inflation, we encourage accelerated appreciation of its effective exchange rate.�
Here are some highlights from the statement:
URGENT ACTION’ NEEDED ON OFF-BALANCE-SHEET ACCOUNTING
CITIES CONCERNS ABOUT CURRENCY MOVES ON ECONOMIC STABILITY
NATIONS ‘COMMITED’ TO TAKING ACTION AS APPROPRIATE
CENTRAL BANK LIQUIDITY EFFORTS ARE ‘HELPING’
NOTES ‘SHARP FLUCTUATIONS’ IN CURRENCIES SINCE FEBRUARY
URGES BANKS TO RAISE CAPITAL AS NECESSARY
URGES BANKS TO ‘FULLY AND PROMPTLY’ DISCLOSE RISK EXPLOSURE
SETS 100-DAY PLAN TO STRENGHTEN FINANCIAL MARKETS
GLOBAL FINANCIAL TURMOIL ‘REMAINS ENTRENCHED’
U.S. HOUSING, OIL PRICES POSE THREATS TO GROWTH
ECONOMIC OUTLOOK ‘WEAKENED,’ CITES ‘DOWNSIDE’ RISKS
WILL CONTINUE TO MONITOR EXCHANGE RATES AS APPROPRIATE
ENCOURAGES CHINA TO ACCELERATE APPRECIATION OF YUAN
WELCOMES CHINA’S DECISION TO INCREASE YUAN FELXIBILITY
SAYS WORLD ECONOMY FACING ‘DIFFICULT PERIOD’
Full G7 Statement:Statement of G-7 Finance Ministers and Central Bank Governors
Washington, DC - We met today amid ongoing challenges to the world economy and international financial system.
The global economy continues to face a difficult period. We remain positive about the long-term resilience of our economies, but near-term global economic prospects have weakened. While economic conditions differ in our countries, downside risks to the outlook persist in view of the ongoing weakness in U.S. residential housing markets, stressed global financial market conditions, the international impact of high oil and commodity prices, and consequent inflation pressures. The performance of emerging markets has been a bright spot, but these countries as well are not immune from global forces.
The turmoil in global financial markets remains challenging and more protracted than we had anticipated. In the context of a weaker economic outlook, financial markets confront the interrelated issues of: re-pricing of risk and significant de-leveraging; managing counterparty risks; accommodating balance sheet adjustments; raising capital; improving the liquidity and functioning of key markets. We welcome efforts by many financial institutions to improve disclosure of exposures to structured products and related risks, and raise significant new capital.
We reaffirmed our strong commitment to continue working closely together to restore sustained growth, maintain price stability, and ensure the smooth and orderly functioning of our financial systems. We welcome the coordination by major central banks to address liquidity pressures in funding markets and recognize the importance of their coordinated actions to address disruptions in global financial markets. In particular, the recent steps taken by some central banks to expand access to central bank lending facilities and expand the range of collateral that they will accept is providing liquidity to financial institutions and helping to support improved market functioning. In addition, we welcome other measures that have been taken including monetary and fiscal policy that aim to give support to underlying economic activity and ensure price stability. Each of us remains committed to taking action, individually and collectively as appropriate, consistent with our respective domestic circumstances.
We reaffirm our shared interest in a strong and stable international financial system. Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability. We continue to monitor exchange markets closely, and cooperate as appropriate. We welcome China’s decision to increase the flexibility of its currency, but in view of its rising current account surplus and domestic inflation, we encourage accelerated appreciation of its effective exchange rate.
Last fall we tasked the Financial Stability Forum (FSF) for a report identifying the underlying causes and weaknesses in the international financial system that contributed to the financial market turmoil. We thank Mario Draghi, the chairman of the Financial Stability Forum, and FSF members, for the report that sets out detailed recommendations to enhance market and institutional resilience. We, the G-7, strongly endorse the report and commit to implementing its recommendations. Rapid implementation of the FSF report will not only enhance the resilience of the global financial system for the longer term but should help to support confidence and improve the functioning of the markets.
The FSF report presents a specific and substantive set of recommendations across five major areas. We have identified the following recommendations among the immediate priorities for implementation within the next 100 days:
Firms should fully and promptly disclose their risk exposures, write-downs, and fair value estimates for complex and illiquid instruments. We strongly encourage financial institutions to make robust risk disclosures in their upcoming mid-year reporting consistent with leading disclosure practices as set out in the FSF’s report.
The International Accounting Standards Board (IASB) and other relevant standard setters should initiate urgent action to improve the accounting and disclosure standards for off-balance sheet entities and enhance its guidance on fair value accounting, particularly on valuing financial instruments in periods of stress.
Firms should strengthen their risk management practices, supported by supervisors’ oversight, including rigorous stress testing. Firms also should strengthen their capital positions as needed.
By July 2008, the Basel Committee should issue revised liquidity risk management guidelines and IOSCO should revise its code of conduct fundamentals for credit rating agencies.
We endorse the following FSF proposals for implementation by end-2008:
Strengthening prudential oversight of capital, liquidity, and risk management: The Basel II capital framework needs timely implementation. The Basel Committee should raise capital requirements for complex structured credit instruments and off-balance sheet vehicles, require additional stress testing, and enhance their monitoring.
Enhancing transparency and valuation: The Basel Committee should issue further guidance to enhance the supervisory assessment of banks’ valuation processes to strengthen disclosures for off-balance sheet entities, securitization exposures, and liquidity commitments.
Changing the role and uses of credit ratings: Investors need to improve their due diligence in the use of ratings. Credit rating agencies should take effective action (consistent with IOSCO’s revised code of conduct) to address the potential for conflicts of interest in their activities, clearly differentiate the ratings for structured products, improve their disclosure of rating methodologies, and assess the quality of information provided by originators, arrangers, and issuers of structured products.
Strengthening the authorities’ responsiveness to risk: Supervisors and central banks should further strengthen cooperation and exchange of information, including the assessment of financial stability risks. It is important that an �international college of supervisors� be established for each of the largest global financial institutions. Market authorities also should act cooperatively and swiftly to investigate and penalize fraud, market abuse, and manipulation.
Implementing robust arrangements for dealing with stress in the financial system: Central banks should be able to supply liquidity effectively during financial system stress, and authorities should review and where necessary strengthen their arrangements for dealing with weak and failing banks, domestically and cross-border.
We ask the FSF and its working group to monitor actively the implementation of the report’s recommendations. It is important that member bodies of the FSF, including the Basel Committee, IOSCO, the IASB, and the Joint Forum, accelerate their timetables of work to conclude their efforts by end-2008 and that the recommendations of the FSF be fully and effectively implemented. We look forward to an update at the Osaka meeting in June and a comprehensive follow-up report by the FSF at our meeting in the fall. We welcome the strengthened cooperation between the FSF and IMF, which should enhance the early warning capabilities of key risks to financial stability.
We also welcome efforts by private-sector participants to develop proposals to contribute to a better functioning of the financial system.
The current financial market turmoil also has raised broad policy issues about the appropriate regulatory frameworks of our financial sectors. We have reaffirmed the importance of reviewing regulatory frameworks to consider whether changes are necessary to ensure that our financial systems are as efficient and stable as possible in the future.
We reaffirm the important role for the IMF in securing global financial stability. In this light we endorse the significant progress on IMF reform:
We welcome the agreement on quota and voice reform in the IMF as an important step to recognize the greater global weight of dynamic economies, many of which are emerging markets, and increasing the voice of low income countries.
We reiterate the importance we place on the IMF’s new framework for surveillance, including for exchange rates, and urge its firm and even-handed implementation.
We welcome progress toward putting the IMF’s finances on a more sustainable footing, including a $100 million annual reduction in administrative expenses. Ongoing budget discipline will be required. We support new sources of income, including an endowment financed by a limited sale of IMF gold.
Taken together, these important reforms will boost the IMF’s legitimacy, effectiveness, and credibility.
Upholding open trade and investment regimes is critical to realizing global prosperity and fighting protectionism. We highlight the urgent need for a successful conclusion to the Doha Development Round. We also commend the OECD work on open investment and the IMF’s commitment to deliver a set of best practices for Sovereign Wealth Funds by the IMF Annual Meetings in October. The policy principles put forward by Abu Dhabi, Singapore, and the United States should be helpful inputs into these processes.
Tonight could be very interresting. I hope it goes north since you are in a long position!!! Dont forget about the 103 u/j barrier. I do not usually trade sunday Asia session but who knows, if tonight brings about some really good opportunities, I may have to.
I’m sure the 15min and 1hr are pattern failures this time…
I think the 15 min chart is the beginning of pattern failures…1hr, 4 hr etc will also fail tonight…I’ve attached the 15min pattern failure from Friday…what do you think?
Yes, tonight is going to be very interesting…many traders will turn on their screens tomorrow and think - WTF happened??:eek:
I hope I’m right with my Long, I’d like to ride this one all the way and trade around my core position too…(there we go, being greedy again! )…We should start to see some slight movement from 2000hrs GMT onwards…Bear in mind it’s the BOJ Minutes at 0100hrs GMT so could be huge movements from 0100hrs onwards.
There again… I could be wrong… Can’t win em all:D
Seems like the pair was mainly rangebound overnight. We tested the 100 % fib and it appears we may test it again. A break of the 100% fib should help to play out the still intact 1 hr H/S pattern. A 1 hr close above the 50% fib may set longs.
Last night was an interesting start with a spike of 100+ across the GBY/JPY, EUR/USD etc, but expected a bit more of a rally 
Added more longs at 198.37, (won’t be trading Sunday night Asian market again though!).
I jumped out at 200.52 and have placed a new long order at 200.20, if we get through 200.20 again I think we are in for a retest of the right shoulder soon.
Right now we are at 199.71…expected a deeper retracement from 200.78 though…Will leave the Long order in place, but looking for a good short entry point too…Are you trading the range pipchick?
Good afternoon shake. I have not traded at all today.I think I will wait until the mkt picks an overall direction.Seems like the 200 ema on the 1 hr provided strong resistance and the 4 hr is looking short again. Usually, I will sell failures when the price is under the 200 ema and am cautious about buying until the price is above the 200 (1 hr). Hopefully momentun will pick up a little later or tomorrow to present some good trading opportunities. I try to remain unbiased about longs or shorts but the 4 hr h/s is still intact so I am thinking the northbound movement that occurred today may be temporary until the rt shoulder is violated.
Good Evening to you Pip,
Bailed out at 199.9 after new Longs were triggered at 200.2…price didn’t move as quickly as I wished… also concerned about effect of EUR/USD and USD/JPY at the moment…
Middle Eastern banks have been buying EUR/USD like mad, and everyone else (including Swissy’s) has jumped on board - many don’t think G7 will do anything to intervene just yet (and I believe them now after that pathetic rally today). This weeks news will hopefully shake the ranges loose…
I think I am going to sell if this 1 hr dbl bottom gives way.
Around 198.70 would be 1st target
Doesnt seem to want to give up the dbl btm yet. I will check back in just a bit. I see an abc pattern on the 1 hr and it looks like a break of the dbl btm should produce some good pips.