QuantumLogicTrading
Short

USDJPY: FADE SHORT ON RALLIES; BUY 104.1 BREAKOUT

FX:USDJPY   U.S. Dollar/Japanese Yen
7 months ago
$Yen

- There is little impetus for this pair this week, with this recent rally likely part of the NFP report flushing out.

- Nonetheless from here I maintain my bearish bias given the BOJ and JPN             govts massive let downs I think USDJPY             topside will struggle and we will move through 100 once the risk-off tone returns (which is likely once the equities rally/ excitement fades... and still waiting); thus, short on rallies into key resistance levels e.g. 102.5, 103.3 is advised.

- However, between the 103.3 and 104.1 level there seems to be an area of "No mans land" which is filled with contradictory bullish/ bearish signals thus i advise not trading the pair between this range.

- Furthermore a break above 104 and close on the daily and my view turns to bullish - citing the relative lows e.g. $yen already 20% down so struggling to fall more or a medium term risk-on shift maintaining thus driving the pair higher through weaker yen demand.

Trading strategy:

1. Sell $yen at 102.5 resistance, 101.6tp1 101tp2.

2. PotentiallY buy $yen on a 104.1 break-out but I will advise on this if it becomes the case.
7 months ago
Comment: 1. On the volatility side we are seeing some bullish/ neutral interest - USDJPY 102.00 (USD 825m) 104.00 (570m) 104.50 (348m). though volume is quite low but is nonetheless bullish/ neutral, with the 104 and 104.5 strike gambles as expected above e.g. 104 breakout likely to make more $Yen buying.

2. The 25D RR are trading flat at +0.1 vol, though we see -0.6 on the 1wks. perhaps indicating directional conviction on the pair is low the market. 1ms offer more conviction at -1.3, which is inline with my view and likely is pricing the fade of the risk-on sentiment occuring at somepoint in the next month leading to $yen selling (yen buying) as risk-off reasserts itself.
7 months ago
Comment: UPDATE:

1. Daily lower confirmation - this signals the risk-on/ uncertain bids should have been flushed out at the 102.5 pivot and now bulls should take over and move us to lower lows e.g. 100.1 should be tested on this extension lower at least.

2. Gold and other safe havens are trading well however correlation between risk and safe haven is low, we need to see a strong negative correlation reassert itself before conviction grows for $yen lower and into the 94-6 range e.g. 2/3 consecutive days lower for SP, and USDJPY and 3 days higher for Gold would be a signal that the risk-off trend is back - given the BOJ miss and the sustained equity topside amidst US political uncertainty and falling Chinese CPI (one measure that the credit boom is starting to drag on the economy - though taken with a pinch of salt relative to last years levels) , we should see a 10% pull-back on the major indicies soon,

- Given new highs i am very interested in taking risk on this equities pull back (normally long only) - so keep a look out for my SPX/ FTSE 10% sell signal.
TradZ
7 months ago
I disagree! 104 level should be considered a kill zone if your observing the Daily
Reply
QuantumLogicTrading TradZ
7 months ago
A kill zone? explain what you mean/ why..
Reply
TradZ QuantumLogicTrading
7 months ago
From observing the Daily I can see a head & shoulders type formation and this up move is just the end before it heads back down, which always the result. This is how I see it
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TradZ TradZ
7 months ago
And 104 area seems to be near that type of move. I don't see it heading further. But as always, we shall see
Reply
QuantumLogicTrading TradZ
7 months ago
thats what i say lol.. sell rallies, however a break and hold above 104 imo is bullish. I will sell the 104 if resistance holds but if it breaks i think $yen will resume higher as it has in the past - preBOJ we saw the 104 break which lead to 107 being reached. the 104 is vital.

My Bias on $Yen is lower, im just advising that I will not be trading the 103.3-104 level as its a area full of bearish/bullish resistance spikes, hence its better to get involved at the 104 itself, rather than before.
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TradZ QuantumLogicTrading
7 months ago
I just placed a buy order@101.85 but best if wait for the Daily close. Aw well, I should still get something out of that lol
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QuantumLogicTrading TradZ
7 months ago
yeah, I personally only like USDJPY lower from here e.g. shorting highs. I will only consider $yen higher if we get to 104 - the fundamentals are all bearish e.g. BOJ under delivering.. however risk markets, and their rally, is helping mute yen demand hence usdjpy has been able to hold it bids.
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TradZ QuantumLogicTrading
7 months ago
Very true! But I'm now placing my order@101.76:)
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QuantumLogicTrading TradZ
7 months ago
the red bar yesterday imo confirmed the bearish sentiment as described above - id cut any $yen longs for now, we could/ will likely move into the 100s now. As I said it was much better to sell at 102 than to buy - fundamentally the environment doesnt have much support for $yen now.
Reply
TradZ QuantumLogicTrading
7 months ago
Yes, I was able to catch this move:) Tried getting in@101.8 but it shot down quick lol I got in@101.607 and out@101.307.. I'm looking for it to retrace back up to 101.6 b4 hour is up. And for the record you had said sell@104 lol jus messN are you in?
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TradZ TradZ
7 months ago
I seen how the market was playing tricks so I let go of the LONG idea. Gd thing I was wtching or else I would have been doomed, well depending on my take profit level. It's getting close to 6, gtta go:)
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TradZ TradZ
7 months ago
I hope you all are scalping, I'm killing it!
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laoboss
7 months ago
how would you play the bearish index view in FX? (i would assume you would go long USD, but against which currency?)
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QuantumLogicTrading laoboss
7 months ago
Kiwi at the moment going into RBNZ looks the best bet... markets are in a weird place at the moment though, apart from kiwi likely to remain on the sidelines... i like aussie long here too.
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laoboss QuantumLogicTrading
7 months ago
I find it disturbing USD is being offered so aggressively this morning despite the lack of news
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