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DYNAMIC STRADDLE: USDJPY & GBPJPY - TP FROM BOJ & FOMC EVENT VOLThe best Idea to play BOJ and FOMC from a risk-averse perspective is to own both in a Long Straddle Strategy Dynamic Straddle: Long USDJPY & Short GBPJPY - TP from volatility & Event likely hoods TP levels = cannot be greedy else you may miss one trades exit point so <25 pips when it goes in your direction for each - total TP = 50pips as 2*25pips Reasoning - Traditional Straddle involves would be long and short the SAME cross.. - However i suggest we long USDJPY as UJ has proportionately MORE upside possibility: 1. FOMC is likely to be neutral-Hawkish, this will help UJ trade flat/ higher = Supports long - - *FOMC PARADOX* important to note that in this sensitive risk-off market if the FED is too hawkish/ hikes it can cause a UJ sell off, as higher rates means greater economic/ market uncertainty as liquidity and financing becomes tighter (despite rate hiking usually making USD trade higher through increased $ deposit demand for higher rates) 2. BOJ is likely to be dovish, this will help UJ to trade higher (especially in this risk averse market - easing helps calm mrkts) = supports long 3. USDJPY ISNT directly impacted by BREXIT fears as GBPJPY as USD and JPY can be considered safety assets, this helps USDJPY trade higher = supports long So we have 3/3 for long USDJPY. - Now to hedge this trade AND benefit from possible downside, we SHORT GBPJPY as GJ has proportionately MORE downside possibility. 1. FOMC neutral-hawkish, drives risk-off momentum (higher rates reduces market liquidity and undermines economic growth thus increasing uncertainty) which drives demand for Yen/JPY, increased demand for JPY supports short GBPJPY 2. BOJ being dovish/ easing potentially helps JPY sell off - however, GBPJPY will be the least sensitive of JPY seller of the JPY crosses, as GBPJPY is the perfect play for Brexit and risk-off, hence in the long run JPY selling wont last long in GBPJPY as once JPY is cheap, buyers will enter to continue hedging/ speculating on brexit with the favourite pair, poor potential/ long run JPY sell side = supports gbpjpy short 3. GBPJPY is directly impacted by Brexit uncertainty in two ways. 1) as investors wish to sell GBP as the uncertainty is only negative for GBP (especially when polls are at 55%). 2) as Investors wish to buy JPY for their "safe haven" asset play. UJ only has the JPY buying to push it lower, which is limited/ offset further as USD buying can also be considered a "safe haven asset) = Supports short GBPJPY We have 3/3 for short GBPJPY Evaluation. - We have 3 points supporting both LONG UJ and SHORT GJ - AND by playing this trade we are able to gain from ALL eventualities, we dont have to guess the BOJ or FOMC outcomes since we have a LONG and a SHORT we have covered ALL eventualities. - Also from a vol perspective, GBPJPY risk reversals continue to become negative by a significant amount 1wks lost 0.6 to -2.1 (from -1.5), so investors continue to demand GBPJPY downside puts for speculation/ hedging - supporting the short. - USDJPY ATM volatility, sold off significantly with 1wks losing 3.55 to 12.45 - lower vol in UJ supports buying. *Any questions on why i think FOMC will be neutral-Hawkish or why BOJ will be dovish-easing please ask in the comments*
by QuantumLogicTrading
Long USDJPY Favored | 150-Week SMA Key Resistance Despite the bullish pressure from the beginning of the week, there has been no H4 Close above the 150-Week SMA. Continued failure at this point and price will likely be pushed back down to 110.600 Pivot / Previous Resistance / 50% Fib of the Wave A-B on Chart (Wave labels are arbitrary in this case). Strategy: Wait and See approach for now. A H4 Close above the aforementioned level and a Long Position will be established targeting 112.500 as part of the measured move. Otherwise, the pair may catch a renewed Bullish bid at the 110.600 Level.
Long
by JeffMzee
USDJPY: Yen long updateTraders, all who followed my reccomendation to short USDJPY are in the money, and with good potential for more downside. We have entered positions to long the Yen (long JPYUSD, short USDJPY, long FXY) and are looking to add to it, either on retrace, any kind of new high, or after a new time at mode signal emerges in the daily chart. For the time being, keep the trade running, you might be able to book half if you want, and move stop loss to entry (not 100% needed). There are 3 possible targets for this trade, the lowest one being the monthly range expansion validation target. If we don't hit this level by May 31st, we might have good opportunities to fade the decline with any valid long setup. For the time being, I'd only look for shorts in this pair, until we either hit the targets, or the downtrend time runs out. The weekly/3 day chart downtrend signal implies continued downside until at least May 26th. Good luck if in the trade, or looking to enter new positions, or join the trend. There will be more chances to do so on the way down, and we will take all opportunities with my private group. Cheers, Ivan Labrie.
Short
by IvanLabrie
4
CADJPY: Potential for huge downside in this pairCADJPY has broken under a previous week's low recently after finding massive supply coming in at a previous low volume resistance level, where the bears showed hand. Interestingly enough, we now have 5 closed quarters without a new high, and a close under the quarterly mode, thus confirming a long term downtrend in this pair is viable. The weekly chart shows us with clarity where the highest activity levels sit. Currently we have 8 week levels where price has transacted at, soon to become 9, thus favoring continuation of the downtrend that kicked off during December 2015. Once we observe price move under 82.774, it'd be safe to assume we might have a sharp decline, with potential to hit the 75 handle in 9 weeks or less. Confirmation according to the time at mode logic would arrive later, but I'm already in this trade based on the daily chart price action. We have 5 days without a new high after today's close, further validating this thesis. You can go short on any intraday retracement, or at market now, with stops above the 85 mark. Good luck if taking this trade, if interested in receiving timely trade signals and/or tuition, contact me privately for more information. I'm currently offering a discount for new clients who opt for my trading course. Cheers, Ivan Labrie.
Short
by IvanLabrie
4
CHFJPY: Want to short oil? Here's a nice proxy pair...CHFJPY is offering a terrific reward/risk opportunity in the daily chart. As you can see I have marked a level of net short positioning for oil futures traders, as well as added the oil line chart as an overlay to the comittment of traders report data indicator so you can see what happened the last time commercial hedgers' net short positions reached these levels. I anticipate downtrend continuation naturally, and as you can see, this pair is a good alternative to outright shorting oil futures, and if you factor in pips instead of % distance, it can outperform the oil shorts, with potentially lower risk (considering the way the chart's setup). As a sidenote, commercial traders are now net short the Swiss Franc, which is good incentive too. (They have been wrong in the Yen, but large specs have captures all major moves in it and are net long and increasing longs currently). Entry is either a new daily low, or a retracement to the red triangle tip with stops above the red line or using 1 to 3 times the daily ATR value. If interested in my trading signals, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year. Cheers, Ivan Labrie.
Short
by IvanLabrie
USDJPY short Opportunity Maybe?As the rally in US stocks continue I taught it would be a good idea to look at the USDJPY since it has been getting beat on in the last few months due to the strengthening of the Japanese Yen. BOJ has introduced negative rates to cause devaluation but that is not working. Going back to Technical Analysis, we can see some support levels that USDJPY is approaching. I am going to sit back and see how this trade progresses forward. It could hit resistance at 105.508 in which if it closes below we could see a a re-tracement or a major draw down for the pair. Or we could see a retest of structure (resistance) and might open on opportunity to get short. Notice that we could be reaching a minor level of overbought so we could see some selling pressure from other traders. Tell me what you think down in the comments. Look forward to hear your taughts on the pair. FX:USDJPY
Short
by Thinkfund
JPYUSD: Long yen, deleveraging in the backgroundIn this chart I analyze the currently active signals in the JPYUSD chart, as an alternative way of approaching USDJPY to prevent biases. I'm seeing an active 2 week trend, which has until June 27th to complete, but also if you dial down to the 3 day chart, you can see a valid uptrend signal emerging from the recent 'impulsive' leg to the upside. I'm interested in going long the yen in this zone, and aim ideally, for a retest of the dowtrend mode near 0.009875. The time at mode signals, tell me price could stop at 0.009256 or 0.009489, so, take heed of these particular levels, for either a retracement or reversal of this trend. I'd expect the equities to correct the recent advance, in the wake of this yen uptrend continuation, as risk off sentiment takes over once more. The trade: Go long JPYUSD, or short USDJPY, ideally on a retracement, but if not, you can take it at market price and keep stops 1.2%+ away from this week's close. Target a 3 to 10% distance from entry, approximately. Holding time, or ETA to reach the targets is before June 27th. Good luck if taking the trades. Cheers, Ivan Labrie.
Long
by IvanLabrie
5
Demand for Gold Rockets HigherIs the once Goldman Sachs "slam dunk sell" turning into a layup buy? I cannot hate the initial call from many investment bank analysts it to sink to $1,000 because, in 2013, I issued a $1,035 bear-call. However, I do ridicule these analysts for unwillingly (either through ignorance or moral hazard) understanding the dynamics of gold. But in 2014 I turned rather bullish on the precious metal. As readers know, I developed a hybrid approach: bullish on physical bullion while understanding that prices are sentiment drive. It was hard to deny that the longer-term fundamentals for gold were strengthening between global stagnation and misguided central banking policies. Despite central banks, primarily the Federal Reserve, trying to fill in the ever-widening gaps via patchwork, market participants remains highly negative up until late December. This year, traders saw absolute carnage for risk assets and the strongest demand for gold in years. GLD has seen massive inflows, only second to SPY. IAU has seen inflows everyday this year. The demand has been so strong, BlackRock (which manages the iShares Gold Trust) suspended share issuance. Secondly, inflows to both popular gold-backed ETFs have not been this strong since the SPX fell 18 percent and the Federal Reserve were mere months from starting quantitative easing in 2009. And, we know what happened after that. Now, the recent move will likely remain volatile as gains on consolidated and traders buy on pullbacks. As you can see in the weekly chart of GLD, the entire move from 2008 to 2011 remained in demand to overbought. If the fund sees a similar nominal gain over the next couple years, traders could see $2,230 for spot gold prices. Considering that the top three central banks have gone over the deep-end to appease risk assets, we could be seeing a resumption of the gold bull market. Please feel free to comment and share charts! And follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
AMEX:GLD
by CommoditiesTrader
Will the BoJ Increase QE In Two Weeks? Doesn't Matter.With markets on edge and Japanese inflation data this week, those short the yen are hoping the Bank of Japan Governor, Haruhiko " Kamikaze " Kuroda, will further increase the balance sheet through more quantitative easing. Because when everything else fails, he'll try to go all in. Or will he? Essentially, his brilliant idea to implement negative rates, or NIRP, was seen as a policy error even quicker than the Fed's first rate hike in seven years. Economists, bulls and bears alike, said that NIRP would do absolutely nothing for the Japanese economy. But, Kuroda didn't go from no NIRP to NIRP in a week's time to strengthen the economy. It was to deter yen strength and perk up hemorrhaging risk assets, which failed miserably. If inflation data comes in soft, we are likely to hear the threat of quantitative easing but it is unlikely that the BoJ can match the most bang for the yen traders saw when this whole quasi-policy began. Analysts expect that Kuroda may increase the level of exchange-traded funds, a market where the BoJ already owns 52 percent , since there is virtually no more debt to purchase do to existing quantitative easing measures. It's possible, but does not matter in the end. The global marco downturn is in the drivers seat, and a single central bank cannot change that, especially when $12.3 trillion in QE and 600-plus rate cuts since the financial crisis have barely kept the global economy spuddering along. With global trade continuing to collapse, the weak yen facade is crumbling. January's exports fell a whopping 12.9 percent and imports dropping 18 percent. GDP contracted 1.5 percent in 2015 on an annual basis, and Japan has seen three recessions since PM Shinzo Abe took over in 2012. External debt and the BoJ balance sheet hit all-time highs (unlike the Nikkei) . Those nickel-and-diming headlines - be careful. As we've seen in February alone, the actions of the BoJ erased nearly eight months of gains. Do macro, or macro will do you HARD. I reiterate a target of 110 by Q3 and 105 by early-2017. That will likely be for starters if the US falls into recession, as forecasted . Potential pullbacks to 114.55 and 116 on central bank induced risk taking probable. The problem with this crusade for inflation, and this goes for all central banks, by reckless measures is fiscal calamity will arise when inflation takes hold. Rates will have to increase, and debt will not be payable. Please feel free to comment and share charts! And follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
by CommoditiesTrader
Implications of Risk (CAD, WTI and Bonus Chart)CADJPY has been setting up to become a great selling opportunity on a macro-standpoint for the following reasons: I was looking for a drop well-before today's action: twitter.com twitter.com twitter.com twitter.com Fundamentals in a nutshell: CAD is highly correlated with WTI crudeoil, both on a fundamental and technical level. There still is no tangible catalysts to cause a significant rally in oil prices. Perceived catalysts have yet to amount to anything substantial. Still, there is no producer willing to cut production as of yet. Furthermore, the macro outlook for Canada is continuing to look like a poor one. JPY is a proxy for risk, which is signalling further turmoil in risk assets, and the correlation of such assets do not bode well for oil prices. Despite BoJ's meandering into NIRP territory, it has been dubbed a policy error almost as quickly as the Fed's single rate hike in seven years. Japan's Finance of Ministry may call of 10Y auction of bonds for the first time ever on fears of negative rates. Still forecasting the US business cycle ending, with a recession in 2016. As with my previous Russell 2000 posts (correct but early!), small caps are supporting the "FIFO" what it comes to domestic economic weakness. Still see a bear market in US equities. Technicals in a nutshell: Price action rallied hard from an oversold position on two fronts: the rumor of a Saudi-Russian deal to cut production (which was refuted by Saudi twice), and the BoJ's decision to cut rates (which occurred as crude stalled). Clearly, if the production cut rumors amounted to something more than talk, clearly that is bullish. However, we must look at it as what is happening and what may happen (from highest probability) and not what we want. The price action on the daily stalled within a long-term demand zone as both positive price action (+DMI) and ADX continued to slope downward. RSI is well out of oversold territory, which gives traders room to continue selling post-squeeze. The stochastic indicator is giving a great sell-signal on the daily chart. Note: indicators on tradingview do not mirror those on my MT4 but are close. I use a 9,3,3 on stochs. BONUS CHART: USDJPY, essentially risk appetite, is trending lower on the monthly chart (this particular chart I made last month but decided to show my awesome readers!). If global fundamentals and aversion to risk occur as I believe, we could see 110 this year. I expect their will be more yen strength even as the dollar remains supported. As I noted when I was on Dukascopy TV in 2014, the Bank of Japan is running out of "tool," as was unlikely to further increase QE. Moreover, traders would loose their faith in central banks and their ability to prop up markets. We're seeing that now. Please feel free to comment and share charts! And follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
by CommoditiesTrader
Wait for a BIG SHORT on EUR/JPYAs the graph analysis can show the pair has been trending in very nice downside trend-channel since June 2015 and the levels provided by the Fibonacci retracement, which I have applied from the peak of December 2014 to the low of April 2015 (around 126.100), seem to offer relevant level of support/resistance. I personally entered in a long position on 11/01/2016 from 127.00, which represents the bottom of my trend channel with target 130.000 ( NEVER BE TO GREEDY WHEN YOU GO AGAINST THE TREND) taking a nice +2.40% on January 28th. However what I am really looking for is to go short at the top of the trend at 133.000 which is a really strong level for 3 main reasons: 1)psychological level (round number) 2)top of a downside trend-channel 3)consistent support/resistance level throughout 2015 As we can see around 132.000 we also have the 75% level of the Fibonacci retracement which represent another good resistance level. Thus my personal recommendation is to enter the short position around this 132.000 level with a not too big order and then wait and see whether the pair will reach the 133.000 and then enter a bigger short position. From there a reasonable target will be the bottom of the trend, just about 126.000 which will represent for sure a very important support level since it is also the lowest point the pair reached since 2013. From the point of view of fundamentals, the recent cut of B.o.J. in the rate at which banks can deposit their excess in reserves, which just became negative -0.1%, in order to try to keep up with inflation, will probably lead to a depreciation of the JPY which would be very nice for my strategy.
Short
by tommaso.gino
Long USD/JPY (12 hours to go until central bank meeting)Japanese central bank is announcing the rate decision and commentary regarding monetary easing in just over 12 hours. The USD/JPY has rebounded from the 116 lows and looks to continue upwards trend. There are fundamental reasons we should expect Yen to weaken: Taro Aso (Japanese Finance Minister) has changed his cautious rhetoric from scepticism regarding monetary easing to acting "without hesitation". Inflation rate was at 0.3% in December, barely avoiding negative values. That is while the target is at 2%. And achievement in 2014 creates pressure to turn around 2016, so that 2015 inflation dynamics are not repeated. Potential rebound of oil prices may not help inflation figures, but its unlikely that Japanese central bank will rest its hopes on that fact. Should central bank fail to introduce any measures we could see the cross trading sideways in 116-119 range waiting for action from Fed or BOJ. It is most likely that trading will be range bound until the meeting, but if 119 is to break we are likely to experience buy the rumour, sell the fact scenario.
by TradingMax