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EUR/JPY taking the early lead in todays trading session...Before: Amid a lacklustre open to the trade session EUR/JPY has taken an early lead in development especially within the daily uptrend. As we are seeing a nice break-out continuation, we should see the final leg to the upside relatively soon. Latest news from this morning: BoJ Governor Kuroda says they are closely watching FX moves but will not comment on details; no need to think the JPY's rise is having serious effects on the economy. EU Chief Brexit Negotiator Barnier said there is good progress but the last stumbling blocks remain and that in this final stretch of talks, transparency and unity are important as ever. (Newswires) EU Chief Brexit Negotiator Barnier reportedly said that a Brexit deal is possible by Friday according to AFP citing sources, while other reports stated that EU Chief Brexit Negotiator Barnier is understood to have told the EU Parliament that a Brexit deal is possible by the weekend but difficult, according to WSJ's Norman. (AFP/WSJ)
by FTUKcom
4
ridethepig | JPY beyond the elections🔸 USDJPY - into the elections Sellers have the move and already played the exchange towards 100 on the initial covid chapter I. They are aiming for the ideal Yearly closing position (the frontal attack against any laggards). I managed to carry out the deeply laid plan (a serious contender for chart of the year) at the beginning and by not being as familiar as I was with the well-known rules on Tradingview. Moreover, I know no other ending in which this precise striving of inflation is more clearly illustrated than in the diagram that follows: Inflation expectations proceed as follows: as dismal Covid data floods the wires => stimulus then becomes a big part of that story 📍 There is no amount of printing that can counter deflation. As globalisation contracts, it creates a deflationary tsunami on the underlying capital formation. We then have to factor in bottlenecks on the supply side from lockdowns, agricultural shortages and etc which create inflationary pressures. The key idea is that they can simply clear the way for the Suganomics/Abenomics with a different pair of Calvin Kleins and prevent the breakdown of 100 is truly the only way to save Japan, because the MT and LT outlooks look awful there. In the more immediate term, the second covid chapter and election protection may keep JPY in demand and lower-time frame rallies will still attract selling interest. Here tracking 105.8x as resistance for another attempt of 104.1x and 100.0x before the king starts its journey. How keenly the speculators are at outguessing the demise of Japan. Thanks as usual for keeping the feedback coming 👍or 👎
Long
by ridethepig
9
RidetheMacro| USDJPY Outlook 2020.09.19📌the USD/JPY currency pair reached one and a half month lows this week at the middle of the 104th figure. In this price area, the southern momentum has faded and now traders are at crossroads: on the one hand – the weakening greenback which again began to lose its positions and on the other hand – the lack of weighty arguments for continuing the downward movement. The results of the September meeting of the Bank of Japan and the data published today on the growth of Japanese inflation did not provide any clarity as the USD/JPY pair continues to trade against the background of a contradictory fundamental picture.📈 🏦 the BoJ said in its Sept. 17 monetary-policy statement. “The pace of improvement is expected to be only moderate while the impact of COVID-19 🦠 remains worldwide.” The Japanese economy shrank 7.9% on quarter in Q2 2020, compared with the preliminary reading of a 7.8% decline and market consensus of an 8.1% drop, and after a 0.6% fall in Q1. This was the third straight quarter of contraction and the steepest on record, amid the severe impact of the COVID-19 crisis. Private consumption tumbled, falling for the third straight quarter (-7.9% vs -0.7% in Q1) 📍 Any material shift in this regard may be exacerbated by a contraction in global growth, with capital flight into the dollar Like, subscribe and leave your comments below! 🤝 Until next time, Ride the macro
Long
by Ridethemacro
4
ridethepig | Nikkei Market Commentary 2020.09.19📌 The Nikkei would have freed some space to the downside with a technical break last week, but given that we have not pierced the support line and buyers are still well-placed we must be wary of a retest in the highs of the multi year top at 24,000 - the same level we have been tracking since 2018!! The more interesting notion comes from the Global Equity board with breaks being led by NY and following through with Europe on the quadruple witching flows. A simple move here would be playing the breakdown for a quick test of the 200 day MA which is +/- 22,000 and on the other perhaps opening up the panic leg towards the lows at 20,300 if the rest of the flows play along. Any moves to the topside lack conviction and the RSI destroys all winning chances for buyers as we approach the highs. Thanks as usual for keeping the feedback coming 👍 or 👎
TVC:NI225Short
by ridethepig
5
ridethepig | USDJPY Market Commentary 2020.09.12📍 JPY Buyers are threatening to breakout. After 107 comes 110 and then 112.x. But sellers have other trump cards, for example covid. My impression is as follows: as the dollar firms and finds a temporary floor therefore can be considered a bounce into the elections which can be somewhat double-edged. If the preconditions are met, namely if we get a continuation of Abenomics with the leadership elections, and effective parries into the Yen are restrained, then beginning the advance towards 150 may be justified. But we should consider the development here to be EARLY/OPENING game. In light of this, we should take longs on a leash and if the market starts paying we can add more size. The technical breakout would lead to buyers occupying the flows. Equities may felt even more the heat if we see a paralysing effect via temporary USD inflows. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
3
Where USDJPY will go?One of the pairs that have been without a clear direction for the longest time is USDJPY. In the chart we see that for the second month we have lower peaks and higher bottoms. This is one of the most famous and reliable figures - a triangle. Such triangles develop at almost all periods. From monthly to 30m. However, if we open the weekly and monthly chart , then there we can see that this is part of a larger triangle. Why do we pay attention to these triangles now? This week will be key! We are expecting news on Wednesday about the Fed's interest rate decision. A few hours later, there is a decision by BoJ. We are also entering a pre-election battle in the USA and the season of JPY movements. Where USDJPY will go will probably become clear this week!
by ForexTrendline
1
ridethepig | NZDJPY Market Commentary 2020.08.15So much for the round of chart updates...@ridethepig has been taking some time off this summer to prepare for a very busy September onwards. 📌 NZDJPY retrace swing is running out steam at the 69.9x / 70.0x highs. While risk remains in the background despite the political fairy-dust, the urge to park capital in the Yen has been maintained but for how much longer? A dovish RBNZ has provided us with a freeing move to the 59.5x lows with a clear direction from foreign asset purchases and -ve rates coming. => Firstly think of the curious circumstances we are looking at when analysing the global macro outlook. The blockade set via inflation and Yields usually turns out to be a severe recession in all respects: => Secondly the momentum is building and confirming the likely sustainability of the NZD outflows and JPY inflows as a double whammy. Positive momentum is coughing after six weeks of chop, this all embracing struggle, is only a means to an end. Remember the importance to strive for mobility, when your central bank confirms its lust to expand the overdraft and buy anything that moves overseas is always sending the currency in one direction. Also for those particularly interested in the region and given the divergence with positive Aussie macro data overnight, it’s no surprise to see AUDNZD continue the grind higher. Sooner or later the NZD capitulation will show itself in NZDJPY and the leg towards 59.5x has appeared. Invalidation in the board will come via a sustained breach above 73.3x. As usual thanks for keeping the feedback coming 👍 or 👎
Short
by ridethepig
12
ridethepig | JPY Long-Term Macro Map The elements of Macro strategy 📍 On the JPY side... It is well known the vulnerability of Japanese corporates in this environment, they are particularly exposed because of the demographics and sector exposures. Restaurants, bars, entertainment etc all are looking very feeble, and with credibility seems to be fading on the monetary and fiscal side too since the latest rounds of stimulus there is room for a massive leg lower in JPY. For those following the conversations on Japanese fiscal bazooka, the sizes are insane... Abe just put through another 6% of GDP and raised the overdraft to +/- 15% of GDP. A comatose recovery is underway, even if the fiscal execution is flawless this will take years to recovery. 📍 On the USD side... Hedging will become a lot lot cheaper with Fed zero rates meaning that the demand for USD will increase as it remains a more attractive hedging instrument than JPY. So we have the following picture: the king stuck in retreat via Covid forcing the front end of the yield curve to stay anchored to rates, while the belly and long end are starting to dislocate and tick higher. This is screaming of longer lasting pain to come . Local politics will provide some ebb and flow although Trump looks a done deal. The only caveat is if Hillary throws her hat in the ring, low odds as per today but of course this will be one to keep an eye on and Biden dependent. 📍 For the technical flows... We are tracking an ABC sequence with the 'C' leg in play after this weekly close. The 151 remains the main target in the sequence with a time horizon of Q4 21 / Q1 22. The monthly chart is a little out of scope for retail trading, instead it will serve as a compass to help our Weekly, Daily and H4 maps. A round of Macro Maps will be uploaded over the weekend. As usual jump in with charts, views, questions or etc and thanks for keeping the support rolling with likes, comments and etc!
Long
by ridethepig
10
ridethepig | The Elements of AUDJPYBuyers made the completion of an ABC corrective sequence to end the move with today's NY session. Europe are now leaving their desks with defensive superiority at the 70.2x highs. Next comes a test of the lows as the next customary inventiveness of swings across risk markets enters into play. The promises of a vaccine any time soon sadly look like unicorns, politicians will do anything to sell the re-open. After the preparatory manoeuvres complete at 0.650x, AUD sellers are keeping an eye on the weak fundamentals. Covid delivered massive blow to Australia, and with little immunity on the health front further pockets of lockdowns look a matter of when rather than if. Now the RBA is a bridge builder, although PBOC are in retreat and sheltering until the storm passes. It means the "Giant Panda" will no longer be on the AUD bid for the next few Months, and Quarters. AUD is surrendering the 70 handle with the close of shop today. Why? Well, because once the bid expires without breaking the barriers ahead, the lust to expand which was missing until then, is well and truly gone now. Early buyers cutting their longs into resistance, and macro players happy to park in JPY in this environment to prevent any breakup. Reassessment in the bearish view will be required above 70.2x as the nature of the move will be considered impulsive. For now expecting it to wend its wearisome way back towards the lows. It will be interesting to see how buyers flee for the close.
Short
by ridethepig
3
AUDJPY: (Still) best SPX macro correlation Wide Aussie - JGB yield spreads in the 2000’s leading up to ‘08 crisis made Aussie dollar / JP yen the go-to levered carry trade used to fuel the US housing CDO bubble (with subsequent bubble burst → mass unwind which strengthened jpy to 70 vs USD). Post crisis era saw the AUDJPY carry trade out back on. 2016- BOJ implements YCC, pinning 10y JGB yields at ~0%, which made Aussie yields the moving variable- AUD became a gauge of macro risk sentiment as carry trades funded risk assets, including NKY & SPX. In the wake of the global slowdown (starting pre COVID), with Australia facing the end of it’s 3 decades without recession, the RBA has since slashed Aussie cash rates to record lows and then moved to implement YCC itself, making RBA the second developed market central bank to do so after BOJ. AUDJPY remains a favorite fx pair among japan margined retail traders, who are more bullish US equities vs domestic NKY. Japan retail is the “glue” between AUDJPY & SPX (eminis) & NKY (NKY mini futures- which now exceed standard NKY index futures in notional traded value)- when japan retail goes risk-on, AUDJPY & equities rise. When they unwind on margin calls, AUDJPY falls alongside index futures liquidation. With other major FX pairs (namely USDJPY) as well as cross asset UST yields, gold, copper, oil, even VIX no longer having any consistent correlation to SPX, AUDJPY is the one macro asset indicator left with positive correlation. And now that US rates have been cut from above → below Aussie rates with Fed Funds pinned at zero for the foreseeable decade+ and UST 2s approaching zero quickly, the RBA policy meetings are the “new” FOMC with respect to central bank short term SPX influence.
by acrossthespread
$SPY : Fib 0.618 retrace at 293$SPY is range bound for the past 14 trading days. It remains above 20 EMA and hence constructive for the intermediate term. Next likely target is the 61.8 fib retrace at 293. $SPY closing below the 20 EMA may start the next leg down. CB's still firing bazookas with BoJ today declaring unlimited buying of government bonds and removed price momentum from its forward guidance. The European Central Bank and the Federal Reserve Bank will also publicize their monetary policy measures this week. Both these banks are fighting the devastation of economic activity in their economies and are expected to retain market supportive policies. However #oil remains under pressure with $WTI down more than 17% and Brent oil down about 4% as of now. Not sure if this weakness in #oil will spill over to the general markets. So far the markets have taken this decimation of oil industry in stride.
AMEX:SPYLong
by insyyte
1