Johanes
Long

JLS Trade: Long USDJPY, CADJPY, NZDJPY, AUDJPY and EURJPY

FX:USDJPY   U.S. Dollar / Japanese Yen
JPY is resuming to carry the USD, CAD, NZD, AUD and EUR as indicated by the USDJPY to be hold at 110.74 (110.50 baseline). Those pairs are expected to move to upward interior their current exchange rate target zone for an estimated 500-700 PIPs balance of target zones to upper ceiling ( USDJPY 117.00 baseline). The 500-700 PIPs balance of target will be traded by multiple tranches of their interdays for 50-100-200 PIPs until the upper ceilings to be reached. This allow for capital accumulation interior the balance of target zones.

The GBPJPY however is still expected to be corrected by EUR and CHF and the long on GBPJPY will be re-entered later.

At the same time, short on EURCAD , EURNZD and EURAUD already placed.
Mar 09
Comment: The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its January meeting and kept the target for the 10-year government bond yield at around zero percent. At the same time, the central bank revised down inflation forecast for fiscal 2019 to average 1.1 percent from an earlier projection of 1.6 percent, mainly due to a decline in crude oil prices and worries over global economic outlook.

In a quarterly outlook report, the BoJ also lowered slightly the inflation forecast for fiscal 2018 to average 0.8 percent from 0.9 percent previously estimated. In addition, policymakers now expects inflation to average 1.5 percent for fiscal 2020 from an earlier estimate of 1.6 percent. Regarding GDP growth, the central bank expects the economy to have grown by 0.9 percent in fiscal 2018, less than a 1.4 percent expansion previously estimated. For fiscal 2019, the GDP is estimated to grow by 0.9 percent, slightly faster than a 0.8 percent expansion in an earlier projection. In fiscal 2020, the GDP is expected to advance 1 percent, stronger than a 0.8 percent growth previously estimated.

With regard to the amount of JGBs to be purchased, the bank will conduct buying at more or less the current pace -- an annual pace of increase of about 80 trillion yen.

The BoJ also determined by an unanimous vote to purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual paces of about JPY 6.0 trillion and about JPY 90 billion, respectively. With a view to lowering risk premia of asset prices in an appropriate manner, the bank may increase or decrease the amount of purchases depending on market conditions. As for CP and corporate bonds, the bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively.
do you not believe that usdjpy should have a correction some time before heading to its 117 target? figured 112 was a good place to look for such correction.
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Johanes raovida
@raovida, price correction not individually but collectively.
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this is a little too fast to decide that 110.5/110.74 is not broken, a drop won't happen in only two days.
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Johanes lapin_eliott
@lapin_eliott, you could be correct but currently the USDJPY is leading the JPY-pegged pairs at current interest rate differentials. Any pressure will always be limited to maintain prices of other JPY-pegged pairs.
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@Johanes, what kind of indicators or news made you think some days ago that carry traders were exiting suddenly ? and what kind of indicators again made you suddenly think that it was not the case ? they have no interest to do that in a panic, it is minimum a matter of days for the move to begin and after it takes weeks for a general move to establish itself
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Johanes lapin_eliott
@lapin_eliott, carry traders entering at lower ceiling and profit booking at central band. during profit booking they are competing each other for closing and result deep drop. however the deep drop is limited by the ceiling of largest and lowest interest rate differentials, if the lowest differential already dependent at band then the higher and largest to be defended. As the lowest interest rate differentials then carry traders jumping back to long. Thus, the indicator for carry traders to enter the market is the "lower ceiling for entry and central ceiling for exit" and "stabilized (pullback) and "central ceiling for reentry and upper ceiling for exit" of their highest versus lowest interest rate differentials.
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beabxmx Johanes
@Johanes, could I see your chart? What’s your “lower ceilings” and “central ceiling”? I assume all you do is use PAs resistance & support levels, sentiment and fundamentals.... no other indicators. My technicals on JPYs - look for long after 14/3-15/3 announcements/news Thx
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Johanes beabxmx
@beabxmx, My trading model or currency band trading does not recognized supports and resistances as well as sentiments. If you talk fundamental the only fundamental in currency band is interest rate policy. Prices are based on interest rate differential-based pricing, the rule of thumb by the equilibrium exchange rate theory. However, beside the central bank's minutes of meetings attention also made on the inflation band and GDP band, or minor attention paid on the indicators to which direction the interest rate policy will be--- however most accurate by following the central banks' minutes of meeting on the policy as the price of FX is measured based on current interest rate differentials. More information may be could be obtained from Bundesbank as they also discuss this matter publicly.
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Johanes Johanes
@Johanes, to understand more in detail about technical resistance and supports you may collect the research technical papers by professor osler from Federal Reserve Bank of New York on his findings during his two years research on technical trading.
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Johanes beabxmx
@beabxmx, No supports:
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