What do we have recent days ?
Stock falls four days cause of worriness about taper. why ?.
+ FED choose taper -- > Less dollar is injected into market --> Stock fall down because it doesn't receive support from FED stimulus and US dollars be stronger.
NIKKEI225 retraces greatly after setting peak --> raise JPY.
We must understand that the advance of USDJPY must be reinforced by NIKKEI225. This is necessary and sufficent conndition.
NIKKEI225 has a strong correlation with US Stock Market. Stock market increase --> NIKKEI225 increases as a result.
US Stock market now need QE3 to rally. If QE3 halt or taper , it will fall down.
So, the condition to FED taper is the US economic data is acceptable.
Now we see a lot of information prove for that.
Today, ADP data is so good. 215K vs 180k consensus
Thus, I expect US NFP will be good to. If NFP is positive , that is the doping for FED taper next meeting in next weeks.
IF FED taper -- US Stock decrease -- > NIkkei225 decrease -- U/J fall down.
The US economy recovers fast -- > FED have the reason to taper.
This is time for retracement. I think USDJPY will retrace after soaring new high. It needs to take a rest.
In the long term, I keep my viewpoint . USDJPY will soar higher to 105 .
In short, all my viewpoints bet on NDP data is positive -- increasing worry about taper -- US Stock fall -- Nikkei225 fall -- USDJPY fall too.
IF NFP data is negative. I am wrong.
I cannot prevent the worriness of all investors about taper. But I believe that FED will not taper next meeting. They will transfer to next meeting : March. I have the reason for my faith. All FED's memvers have dovish stance, and FED vice president Yallen stance is dovish, very dovish.
Look at on the chart:
- Price hit 2.618 Fib extension level and bounce back. This level becomes key resistance. Indeed, 2.618 Fib extension is a very strong resistance, to break it, market must provide data which is strong enough to break it. Now I don't see that data.
- Today, price retraces to 23.6% fib retracement I show on the chart. Base on my , I think U/J will retrace more. My target is 38% Fib retracement level.
So I have three targets to take profit now:
- 23.6% fib retracement -- 101.84
- The support line : 101.25
- And 38% Fib retracement , it is also 101 strong -- 101
Stop Loss: 2.618 fib extension : 103.34
Short at 102.40/50 or anywhere from current price.
This chart for next two weeks.
If NFP is negative. This analysis must be deleted. The position must close.
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But today, ADP employment data is very good, ADP good -- 80% NFP is good.
Usually, NFP above 180k is positive, below 180k is negative.
The unemployment rate of US might be below 7.2% on Friday because Jobless Claim decreases very much -- Unemployment Rate decrease.