Does anyone else out there believe that within the next 6-18 months both the USD and CAD will rebound bigtime against the JPY? I have a hunch that we’ll see mid-90s, possibility breaking the 100 mark. Just a matter of time…
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Hello,
While it is very difficult to predict what will happen over such a long period because so much could happen (did anyone predict the japan earthquake coming?) any answer to that question would just be speculation. However…
The way I look at it, its not a question of “will usd and Cad rebound against JPY?” but will JPY fall in value. Keep in mind that japan’s economy is somewhat backwards in that a weakened JPY is better for the economy due to the fact that they rely so heavily on exports (foreigners get more for their money). Also, they keep their interest rates very low (which I dont really understand the reasons for/against- I am no expert).
The earthquake was obviously a major event that affected the markets, but some analysts say that a jolt like that was a long time coming. It all really depends on the recovery and whether or not they make they most of their situation (which is pretty bad). Previously they relied on exports of goods (cars, electronics, sushi, samurais etcetc), there has been speculation that now is a chance to change the economic direction.
Perhaps we may see a long term strengthening of the yen as the western currencies struggle with debt (euro, dollar etc). I thought that the BoJ was going to pump so much money into the market to force the price to keep rising in order to entice foreign investment in the recover and although they did some of that, it doesnt seem to have mademuch difference. Maybe the west is too busy dealing with itself, or maybe Japan isnt going to be the centre of easter attention (china up and coming).
Anyway, this is just my speculation and I am in no way an expert, or even “in the know”. I have been on the wrong side of plenty of USD/JPY trades 
I think that this is good fodder for a conversation over a few drinks in a pub, but in terms of trading my answer would have to be ‘tough to predict’. There is a US election (which might yet be won by Obama simply because the Republicans fail to provide a credible candidate), oil prices are very unpredictable, the Eurozone could suffer a meltdown or sort its problems out - if the last couple of years have taught us anything, it is that international politics, and in particular where they relate to economies/currency values etc., are very volatile. After all many experts, including whole governments, failed to predict the global recession.
There is no inherent strength in USD at the moment, to speak of, it is simply not weakening as badly as the Euro, GBP is pretty flaky, so there are many issues for these currencies to sort out before they strengthen against anything. Couple that with an economic picture in Japan that is complex to say the least (rebuilding costs still open ended, nuclear industry in turmoil, export market very unpredictable, car industry under pressure globally etc.) and you won’t find many experts happy to predict much for next year.
I would not bet against a strong move in either direction. The markets are so sensitive to news and innuendo, these days, that we may well get both!
I agree with TWHM (in particular his first paragraph!).
(And please note, the Obama point was not made as either a pro- or anti-Obama one, but simply a wider point that he might almost win by default, which is not good for anyone)
ST
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Hello,
This is the basic problem I have with so called position trading. Holding a position to for months, if not years, seems to stink of gambling as there is so much to change, and so little to base your beliefs on. I ask the OP, what evidence do you have that makes you believe the USD and CAD will rebound? Past performance? I work along side financial advisers and their tag line is basically “past performance is no gaurantee of future performance”!
I remember reading somewhere someones distain at a newbie who would assume price would come back up by looking at the chart and concluding “it has gone down enough”.
TWHM
I realize that you did not ask me a question, but I instinctively agree with you. However, position trades can work with a wide, conservative Stop that is not trailed up too tight. I have held trades open for quite a while on a few occasions, simply as the trend prevailed and I had no TP set as an order. I kept trailing my Stop, expecting to be taken out, and would keep waking up to find that Price had moved with me. I did this last year entering a Short position of the Daily chart of SGD/USD. I entered in the Summer, and kept trailing my Stop to just above the latest S/R level. Price would drop through, retest that level but then move south again without taking me out. I ended up coming out of the trade in the Autumn. Looking at the USD/CAD Daily chart the same would have worked on there, but I did not trade that (I did take many Short trades, they just played out and closed ‘as normal’).
So I am not sure that I have added much, but my fluke trade on SGD/USD did persuade me that this approach can work. It is down to trading personality, I guess - it would often, imho, be more profitable to trade each smaller move down, then reenter at a better price when the next setup arrives. But obviously more work, too!
ST
Hello,
I think we are both singing from the same song sheet, so I wont drag this out arguing how right we both are
Yes I do agree that position trades are possible ways to make money. I’m far too inexperienced to tell people what works and doesnt. The only problem I have is that, in hindsight, it is very easy to see where position trades would have worked. Just look on a chart on the weekly/monthly TF and look for a looong up/down trend. But, here is the kicker;
how do you know at the time that each retracement isnt a reversal of the main trend? you dont!
so, as you said, would it be so bad to exit the trade at a retracement and then wait for a continuation? you may have to pay the spread and you may miss a few pips between trades, but at least you would be able to have a lot less risk involved in regards to stops and margins. I think the added work would be worth it.
Anyway, I fear we have hijacked this thread (not that the OP seems to be too bothered :P) and are going off topic. Perhaps we should return in 6-18 months and see how many thousands of pips we missed out on.
TWHM
On Thursday, the dollar slightly rose in price against other major currencies, receiving support as a result of a positive statement by the Fed, made on Wednesday after the results of its meeting. The yen became cheaper: the pair USD/JPY increased by 0.32% to 109.53.
On Friday, the dollar appreciated against other major currencies. Investors expected the release of important data on employment in the US against the backdrop of a recent announcement by the Fed in support of tightening monetary policy. The pair USD / JPY increased by 0.43% to 109.88. We’ll see how the week ends.
The dollar/yen was indecisive yesterday. Views are neutral in the near future. The closest resistance is seen at 109.70. A clear break above this level may take the price to a neutral zone with testing at 110.15 - 110.65. The intraday support is 108.90. A clear breakthrough under it could cause further downward pressure on testing support 108.50-107.50, which remains a good place for long positions.
On Friday, the US dollar moved to growth against other major currencies after the US Congress voted for an agreement on the parameters of the federal budget for the next two years, ending a short suspension of the government.
The yen has changed insignificantly: the pair USD/JPY was trading around 108.75.
The dollar/yen tried to lower yesterday, reaching a bottom at 106.37, but closed higher at 106.94, forming another ascending pin bar. Trade signals are neutral in a short term. The closest resistance is at 107.13 (yesterday’s peak), which breakthrough could lead to future upward pressure for testing 107.50 - 108.00. The nearest support is at 106.37. A clear breakthrough under it can cause pressure down for testing 105.50.
The dollar / yen did not make a substantial move yesterday but traded higher earlier today, hitting 106.93. The commercial signals are up for testing 107.20 in a near perspective. Immediate support is available at 106.35 / 25, whose breakthrough can take the price to a neutral zone with a key support rebate 105.50. This region is a good place to buy with a narrow stop loss.
The dollar / yen was not able to continue its inertia up yesterday, reaching a bottom of 106.31 and hit 106.24 earlier today. From a different technical perspective, perhaps we have the formation of a potential downward triangle figure. The signals are neutral for the time being, probably with a slight bearish look at 105.50 retesting. A clear breakthrough and daily closure under this support may cause further downward pressure on the 104.25 test. The closest resistance is 106.50, whose breakthrough can lead to bulls testing for 107.00. Overall, I remain neutral.
The dollar / yen did not make a substantial move yesterday, but continued to make lower tops and bottoms after falling from 107.28 on Tuesday. Traffic signals are bearish to test support 105.50. A clear breakthrough and daily closure below this level will open the doors to 104.25. The first resistance is 106.35 (the current peak), whose breakthrough can take the price to a neutral trading area with a test of 106.75. If the bearish triangle scenario is valid, we may see a variable motion with peaks not higher than 107.00 until the next week before the price breaks below 105.50 and goes down. Overall, I remain neutral.
The dollar / yen failed to keep moving down yesterday and now moves back inside the bearish triangle. This fact resolves the scenario down the formed triangle. The commercial signals are up for testing 106.05 in the near future. Immediate support we have at 105.37 (current bottom). A clear break below it can take the price to a neutral zone with a test of 104.62.
The dollar / yen made a move up yesterday, reaching a peak of 107.51 and hit 107.72 earlier this morning. The outlook remains up for testing 107.77 in the near future. A clear break above this level may cause further bullish pressure to test 108.50. Immediate support is seen at 107.35 (current bottom). A clear breakthrough under it could take the price to a neutral zone with testing at 107.00-106.60.
USD/JPY
Key levels to watch for:
Support: 106.65; 105.96;
Resistance: 107.28; 107.90; 108.27;
The US dollar was up against the Japanese yen on Friday. By the close of US trading, USD/JPY was trading at 107.66, gaining 0.28%. I believe that support is now at around 106.86, Tuesday’s low, and resistance is at 107.86, the high of Friday’s trading.
The dollar recorded another win over the yen on Wednesday. The US currency continued the bullish trend since the beginning of the week and as a result the resistance at 109.30 was pierced. Short-term indicators remain in favor of the dollar. The session was opened at a price of 108.81 and the final line was cut 61 pips higher. Peak for the day was reached at 109.45.
USD/JPY
Key levels to watch for:
Support: 106.86; 106.64;
Resistance: 109.30; 109.77;