USDJPY COT-STUDY Q1-23: BEARISH CONTINUATION?
Monetary Policy:
- BOJ is making a significant change
- Longterm YieldCurveControl target of 0,25% is relaxed to 0.50%
- Higher targets are to be considered
- This would mean more YEN-strength
- FED still hiking rates, but expected target-rate for 2023 is moderate: 4,75% - 5.00%
COT:
- Institutions started distributing USD-Longs since Q3-22
- Insititutions started distributing JPY-Shorts since Q4-22
- Both moves reinforce eachother in pushing down USDJPY
- Distribution-phase seems to continue in Q1-23
Seasonality:
- JAN is generally weak for USDJPY, so in line with expectations
- FEB & MAR are not weak for USDJPY (but Monetary Policy & COT outweigh Seasonality)
Pivot Points:
- Q4 was (fast) run from Quarterly R1 to Quarterly S1
- Looks like mid-DEC was start of frontrun Q1-23
- Projected Quarterly Pivot for Q1-23 was sold end DEC-22
- Quarterly Pivot predicts Quarterly S2 with QS1 as (conservative) first target = 125
- BOJ is making a significant change
- Longterm YieldCurveControl target of 0,25% is relaxed to 0.50%
- Higher targets are to be considered
- This would mean more YEN-strength
- FED still hiking rates, but expected target-rate for 2023 is moderate: 4,75% - 5.00%
COT:
- Institutions started distributing USD-Longs since Q3-22
- Insititutions started distributing JPY-Shorts since Q4-22
- Both moves reinforce eachother in pushing down USDJPY
- Distribution-phase seems to continue in Q1-23
Seasonality:
- JAN is generally weak for USDJPY, so in line with expectations
- FEB & MAR are not weak for USDJPY (but Monetary Policy & COT outweigh Seasonality)
Pivot Points:
- Q4 was (fast) run from Quarterly R1 to Quarterly S1
- Looks like mid-DEC was start of frontrun Q1-23
- Projected Quarterly Pivot for Q1-23 was sold end DEC-22
- Quarterly Pivot predicts Quarterly S2 with QS1 as (conservative) first target = 125
Sultan of Swing
