USDJPY SHORT - Fed Unwinding pushes dollar lower
Doji candle has shown some indecision before pushing down and breaking a key past support price.
The context of price here is key.
Since we know that a decision has been made here that has pushed price out of a range value, we know that a return to this zone is going to have a fair amount of supply resting here.
Fundamentally, we have to keep the Fed's balance sheet unwinding as central to our thesis and almost ignore all of the other narratives occurring, such as trade wars and actual wars.
If you look at USD funding costs, as the Fed sheds the assets held on its balance sheet, 3 month LIBOR increases (and has increased steadily over the last year, but has gone parabolic since the Fed started unwinding).
The context of price here is key.
Since we know that a decision has been made here that has pushed price out of a range value, we know that a return to this zone is going to have a fair amount of supply resting here.
Fundamentally, we have to keep the Fed's balance sheet unwinding as central to our thesis and almost ignore all of the other narratives occurring, such as trade wars and actual wars.
If you look at USD funding costs, as the Fed sheds the assets held on its balance sheet, 3 month LIBOR increases (and has increased steadily over the last year, but has gone parabolic since the Fed started unwinding).
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