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Safehaven

North Korea - Risk Off trade over weekendTomorrow is North Korea national day and whether or not they will launch another missile is unknown (and if they do Trump will do something just about as stupid). I'm betting there will be some retreat to Risk off asset such as the JPY. The tricky thing is which pair to pick. I've already had exposure to NZD short and CAD long. My rationale is if there is something wrong with the world, real asset or safe haven asset appreciate, this applies to NZD, AUD, CAD and JPY, not so much for the fiat currencies of EUR or USD. The ECB and Fed are quite Dovish in my opinion, I really can't figure out who's more determined than whom yet though. My plan is to split the bet into Short EURJPY and USDJPY at the same time. EUR has no major news next week why USD has CPI on Wednesday so I may not be able to hold that part as far. On the retail sentiment, JPY is being sold and I can't be more happy to go Long.
Short
by vietbach1990
Gold still looks cheap, when we look at it this wayBeware the appearance of the wave lengths as this is a semi-log chart. As far as historic data allows it, I can count the rallies as impulsive. From the bottom of the chart (251.90) up to I (1920.70), there are $ 1’668.80. Multiplying this by 1.618 ($ 2’700), and adding them to the bottom of II (1046.33), we find a minimum target for wave III at $ 3’746 ! On a shorter term basis let’s do the same to find the minimum target for wave 3. As wave 1 equals $ 328.71, multiplying this by 1.618 (531.85) and adding them to the bottom of wave 2 (1122.57), we find 1’654. Buying now at 1’346 with stop/loss at 1’269 (below top of what I consider to be a wave i) with target at 3’690. Once 1’654 is reached, trail the stop/loss from 1’269 to breakeven (the top of wave 1 at 1’375 shouldn’t be overlapped by the future wave 4). Initial reward/risk ratio close to 31. Once the stop/loss is trailed there will be no risk of loss anymore. So people still not long Gold don’t have missed the train yet, there is still plenty of potential upwards I think. Better to buy it physically and vs USD though as safe haven. As the proverb says: invest 10 % of your portfolio and hope it goes down. Of course it is not real to consider selling on stop/loss a physical position, only because of the spread, so start with CFDs. If the following levels are taken out, my scenario will take shape: 1’532 and 1’921. Start switching your CFDs for physical as this would not be a good sign for the economy.
FOREXCOM:XAUUSDLong
by montanniv
Japanese Yen (USDJPY) May 2017 OverviewWith geopolitical tension rising in the Asia, the Japanese Yen benefitted from its safe haven status in the second half of May, gaining around 400 pips in one week. The Japanese large positive external balance as well as huge international investments have driven yen’s demand even further, which mark the strength at 110 against the dollar – down from May’s high of above 114. Although the country has defeated the long-year deflation, real price gains still remain weak at 0.2% year on year – far below the Bank of Japan’s target of 2%. In the long term perspective, we still expect the Yen to weaken, and potentially driving the USDJPY towards the high around 120.
by KarYong
USDJPY Epic Descending Triangle Breakdown ImminentOANDA:USDJPY has consolidated for a few days already and failed to retake the 112 level. With a series of lower highs, the supply resistance level is slowly going down to meet with the Weekly 200MA support. Its possible it might find support at the Daily 200MA level as it was able bounce off it from the previous downleg. In my opinion it might still test the 111 level one more time before the support finally breaks. Entry: 111.044 Profit: 108.215 Stop: 111.325 Any feedbacks are appreciated!
Short
by SimpleMillennialAverage
2
NZDUSD and a Confluence of SupportsOANDA:NZDUSD looks like its forming a nice floor where a lot of key technical levels and indicators are at. 4H Moving Averages: OANDA:NZDUSD was able to get above key moving averages in the 4H timeframe and it has held well so far. Weekly Higher Lows Trendline: Even after some attempts of breaking the trendline it has held so far and looks like it was able to get back above it The Daily 200MA should provide decent resistance but its also possible that it might still break through it to test the 0.73 level once more Entry: 0.70237 Stop: 0.697 Profit: (tp1) 0.7137 (tp2) 0.73368 Any feedbacks are appreciated!
Long
by SimpleMillennialAverage
2
USDJPY safe-haven play on increased geopolitical risksChart of the day: USDJPY. Safe-haven buying kicked in heavily Tuesday, also giving a boost to other local Asian currencies. Geopolitical unrest levels have risen substantially over the last few weeks: Syria, N.Korea, Russia and this has led to a move to buy those 'safer' assets. Gold, Yen all should benefit from the uncertainty. On the Kagi chart the Yen is now back to mid 2016 numbers, breaking out of the bands, but playing on a key Fibonacci 38.2% line at just under 110, which could offer some resistance. A confirmed break here could see the price noise around 106 targeted, then to the lows just under 100. Any rebound in the shorter term has 112 and 115 in its sights.
Short
by StephenHoad
Reminder: Gold investment idea for the year 2017Gold could be a great very long-term investment entry to hedge against a crash of the "S&P 500" in the year 2017 and beyond, after the election of Donald Trump. Here is my original "Gold" chart I made 5 months ago. The price of my lower entry arrow has been reached, plus the time window has been reached, which is why I publish this reminder. This chart is posted as neutral, because there is not yet enough price movement to the upside to fully confirm this entry signal, plus the time window has just started. So there could be one more dip to the downside before the actual larger rally starts later in 2017. Ideas supporting Gold as safe haven investment in 2017 and beyond: The new US president sleeps only 3-4 hours per night according to his butler and according to his 2004 book "Trump: Think Like a Billionaire". This lack of sleep might cause chronic sleep deprivation, with symptoms including sudden mood swings and emotional imbalance. That could lead to more stock market volatility in the future, which would benefit safe haven assets like "Gold". Trump has appointed more military generals in his cabinet than any president since World War II. This might lead to a foreign policy that is less inspired by civilian ideas and more heavily dependent on U.S. military. In addition the political risks around the world are increasing, as measured by the “Economic Policy Uncertainty” (EPU) index, which scans the entire spectrum of news sources each day for words indicating worry, doubt, and contingency about policy direction. This index has negative correlation with equity prices and a high positive correlation with stock market volatility. In most economies around the world, the EPU index is currently surging. A GDP-weighted average of the EPU indexes from 17 countries has recently hit unprecedented heights—higher than 9/11, Gulf War II, the GFC, or the Euro-Crisis of 2011. Sources: Will Policy Uncertainty Hammer Markets? The “Economic Policy Uncertainty” (EPU) index www.forbes.com Trump's butler for almost 30 years www.bbc.com Trump's potential chronic sleep deprivation www.huffingtonpost.com Trump's admiration of generals www.politico.com
AMEX:GLD
by ChartArt
3
LONG GOLD XAUUSD: RISK-OFF ASSETS TRADING CHEAP ON US STOCK DIPGold Positioning - Buy @ Market; 1350TP1 1370TP2 - 1 lot (small) and add double every daily close lower - 1lot, 2lots tomorrow, 4lots the next day: 1. Risk sentiment looks to be turning south, particularly in US equities which have seen monthly lows which is consistent with the broad equity valuation correction lower that i have been expecting for the past few weeks. - However the highly correlated safe haven assets look to be showing some divergence/ value by also trading lower. Given im a risk-sentiment bear, I back this view with short SPX and long Gold/ YEN. 2. Also Fed unlikely to hike means USD demand is likely to be parred which puts less pressure on gold, but either way, a hike increases risk-off and will drive gold/ haven demand so it is a win win situation. 3. Statistically gold is also a long after trading lower 5 days in a row which for the past 16yrs of data is a 1/100 chance of having a bullish day for the next day (today). Also on the weekly we are 1.3 deviations lower, with the monthly and quaterly at 0.9sd and 0.7sd lower. 4. Risk here looks to be to the 1300 pivot with topside at 1350, 1370 and 1400 - i personally feel we can see gold bid to 1370 on a SPX to 2000 backdrop, a fed hike would have my bets moving SPX well through 2000.
FX:XAUUSDLong
by QuantumLogicTrading
3
USDJPY RTRS FORECAST: BOJ/ MOF - COMMENTS ABE, KURODA, ASAKAWAInterestingly the RTRS poll for Aug has a bullish near-term bias for $yen vs in July - my opinion is contrary to their poll as the BOJ and JPY MOF failed to deliver the hype expected/ promised this past week - i think 101/2 is much more likely for the next 3 months vs their 103.8. Comments from PM Abe, MOF and BOJ minutes that we observed in the Asia session were much of the same but once again markets digest the information as "actionless" as we have heard one too many times about the JPY govt/ BOJ's willingness to intervene in FX markets "if need be" yet their policy fails to back up such claims. Further in all honesty the BOJ has only ever intervened in the $yen price in recent times (post 2008) when it has been less than 90, and closer to 80 - so in reality imo we have until atleast 94 before we have to worry about any potential intervention spikes. My view on $Yen remains bearish, with broad USD strength today helping $yen rise into the 101.5 pivot level which it has failed to break so far - i expect $yen to test this level several more times today - failure to break and i will short OR i am happy to short at the 102 level which is likely to be very restrictive anyway. Targets to the downside are 100.5 and 100, then 99. Through 99 we look towards the 94 level. a Push here will require the risk-off tone of 2016 to continue to dominate this half of the year too, whihc seems somewhat likely as gold continues to rally close to yearly highs yesterday and US presidential elections, FOMC hike projections and brexit uncertainty still linger. A close below 98.5 and the clear selling target is 94 - this is my terminal forecast for $yne before any bull trend can emerge - with failiure from BOJ to diverge their policy more in the highly pressured july meeting, im struggling to see what drivers there are to move $yen higher and through the 104 key level going forward - imo a 20-30bps depo rate and LSP cut, combined with a 10-20trn JGB extension is what is require to see $Yen maintain the 110 level and be able to fight the risk-off pressures. Until BOJ policy is adapted in such a way, selling remains the bias. REUTERS POLL - 1. YEN TO WEAKEN TO 103.8 TO THE DOLLAR IN THREE MONTHS, 105.0 IN SIX MONTHS, AND 107.7 IN A YEAR (VS 103.0, 105.0, 108.0 IN JULY) JPY PM Abe highlights: -JAPAN PM ABE: EXTRA BUDGET TO BE SUBMITTED TO DIET IN AUTUMN -JAPAN PM ABE: ECONOMY IS TOP POLICY PRIORITY FOR NEW CABINET -ABE: TO STRENGTHEN TIES WITH NEIGHBOURS LIKE CHINA, S KOREA -ABE: NOT THINKING ABOUT SEEKING TO EXTEND TERM AS LDP PRESIDENT Economy -ABE: I TRUST KURODA'S ABILITY AS BOJ GOVERNOR -ABE: SPECIFIC MONETARY POLICY STEPS UP TO BOJ TO DECIDE -ABE: KURODA HAS SAID THERE'S NO LIMIT TO BOJ'S MONETARY POLICY JPY MOF's Asakawa Highlights -JAPAN MOF'S ASAKAWA: IF NEEDED, READY TO ACT ON JPY IN LINE WITH G-7 AGREEMENT -JAPAN MOF ASAKAWA: INTEREST RATES, CURRENCY MARKET ARE VOLATILE -JAPAN MOF ASAKAWA: CLOSELY WATCHING FOREX MARKET MOVES -JAPAN MOF ASAKAWA: CLOSELY WATCHING FX MARKET TO PREVENT SPECULATIVE MOVES FROM BECOMING ACTIVE -JAPAN MOF ASAKAWA: FOREX MARKET SHOWING ONE-SIDED AND SPECULATIVE MOVES -JAPAN MOF ASAKAWA: WILL RESPOND TO CURRENCY MOVES IF NEEDED IN LINE WITH G7, G20 AGREEMENT -JAPAN MOF ASAKAWA: Recent Rise In JPY Is 'Quite Biased, One-Sided, Speculator-Driven' -JAPAN MOF ASAKAWA: JGB Yield Volatility, JPY FX Rate Is 'Very High'
Short
by QuantumLogicTrading
GBPJPY: BOJ MISS; BOE HIT? MORE SELLING ON THE HORIZONBOJ Miss: 1. BOJ deliver one of the biggest misses in history (vs expectations/ pressure) - only increasing ETF purchases and dollar funding by apprx $60bn annual in total vs 10-20bps of Depo and LSP cuts + 5-20trn in QE increase + ETF increase. *See attached post for in-depth detail on the BOJ situation and price action history/ Yen strength/ Safe havens* BOJ Miss Compounded with a BOE Hit: 1. BOE are expected to ease by 25bps and possibly add 50bn to their QE programme on Thursday - a BOJ miss combined with a BOJ hit should cause compounded losses for GBPJPY as there are two drivers - Yen should continue this week to get stronger (as BOJ easing expectations surpass and Yen strength increases) whilst GBP gets weaker as the BOE on Thursday likely takes action, reducing the value of Sterling - with both providing the optimal environment for downside. - Historically, when BOJ has delivered new policy/ missed GBPJPY has sold off aggressively between 2-8days and 700-1200pips. Now whilst I dont expect the same level of aggression in the near-term as the relative value is much lower now (135 vs 175) so moves lower should be smaller - I do expect that 400pips lower on the day is not the end of the selling rally for GBPJPY. - Initially at the start of the week i expect GBPJPY to move lower at least another day (satisfying historical moves), perhaps into the 133.5 level which would be 550pips, lower than the smallest sell-off but fair given the relative value changes - not that i would be surprised to see more. - Later into the week is when I expect the bulk of GBPJPY losses to come (e.g. Thurs/ Fri) - the reason for this is as 1) any Yen downside risk from the MOF releasing upside in the details of their stimulus package would have surpassed e.g. increased stimulus from 28trn-40trn (unlikely) or increased govt spending section - both of which devaluing yen moving gbpjpy potentially higher. Though I think the risks are more skewed to MOF delivering a package that strengthens JPY as it undershoots expectations as several MOF members have mentioned the package being over several years - the more years the less punch the package has (given some expected it (5% of gdp) to be spent in 1yr), equally the less direct govt spending portion of the package will also lessen the depreciative impact on yen (rumoured to be 13trn, if less then Yen could get considerably stronger). As mentioned I see the MOF release to be asymmetrically skewed to expectation downside for these reasons. 2) BOE GBP selling pressure would happen when they cut the rate and adjust their QE programme - this is a highly likely scenario as BOE MPC Minutes in July said "Most members expect to loosen policy in August" and recently the BOE's biggest hawk M. Weale switched stance in light of UK Business PMI/ Optimism prints at 10yr lows saying the BOE needs to act fast/ delaying policy further doesn't make sense. Trading strategy: Sell GBPJPY @mrkt 133.5TP1 130.5TP2 128.5TP3 - risk averse traders could wait for the 50-60% MOF/ general Vol bounce into 136-38 level before shorting - I would reshort here anyway.
Short
by QuantumLogicTrading
11