USDJPY - Pull back, but how deep it can go?
- JPY has lost almost 60 % ag USD in last 2,5 years
- US rate hike is priced in (if it happens at all, I don't know)
- Japan macro figures have started to improve (Retail sales, consumption, CPI)
- BoJ is still dovish, but I have the feeling they already have the Exit Strategy from QE: they will simply buy all bonds,Japan will finally do a 70 % haircut on its debt or completely erase it which will not be a default, since they will hold it all as domestic. Maybe that part which is still held by some intl investors/institutions will be either paid out or will be swapped to new issues.
- When global risk off hits mkts, JPY tend to perform quite well. (unwind of carry trades, etc.)
So, my point here is that ok, the trend is Bullish. But ljust like in case of equities I do not see a lot more juice in this ccy to be squeezed. I don't say it can not spike to 128-130, but from now on I think we should become less and less bearish on JPY. Maybe it is not that sht any more as it looks like.
Weekly:
- Bullish Ichimoku setup, bullish trend. Kijun Sen is catching up to price. Ultimate bullish support will possibly be around 116-117,50 (as trendline and Senkou B will catch up higher later)
- Heikin Ashi signal turns bearish. The pull back started two weeks ago, we saw some hesitation last week and it looks like a bearish continuation now, but this week has just started.
- Within the major bullish trend channel we also have a possible bearish wedge, which together with Kijun Sen makes 120,85 level even more important
Daily:
- Ichimoku setup has turned back to neutral, Price breaks below Kijun Sen and tests Kumo support. Weak bearish Tenkan/Kijun cross. Watch the possible wedge! In case lower side is broken, which also means a Kumo break, then sellers can take control and push price towards 118.
- Heikin Ashi signal is firm bearish now, pull back in progress.
- US rate hike is priced in (if it happens at all, I don't know)
- Japan macro figures have started to improve (Retail sales, consumption, CPI)
- BoJ is still dovish, but I have the feeling they already have the Exit Strategy from QE: they will simply buy all bonds,Japan will finally do a 70 % haircut on its debt or completely erase it which will not be a default, since they will hold it all as domestic. Maybe that part which is still held by some intl investors/institutions will be either paid out or will be swapped to new issues.
- When global risk off hits mkts, JPY tend to perform quite well. (unwind of carry trades, etc.)
So, my point here is that ok, the trend is Bullish. But ljust like in case of equities I do not see a lot more juice in this ccy to be squeezed. I don't say it can not spike to 128-130, but from now on I think we should become less and less bearish on JPY. Maybe it is not that sht any more as it looks like.
Weekly:
- Bullish Ichimoku setup, bullish trend. Kijun Sen is catching up to price. Ultimate bullish support will possibly be around 116-117,50 (as trendline and Senkou B will catch up higher later)
- Heikin Ashi signal turns bearish. The pull back started two weeks ago, we saw some hesitation last week and it looks like a bearish continuation now, but this week has just started.
- Within the major bullish trend channel we also have a possible bearish wedge, which together with Kijun Sen makes 120,85 level even more important
Daily:
- Ichimoku setup has turned back to neutral, Price breaks below Kijun Sen and tests Kumo support. Weak bearish Tenkan/Kijun cross. Watch the possible wedge! In case lower side is broken, which also means a Kumo break, then sellers can take control and push price towards 118.
- Heikin Ashi signal is firm bearish now, pull back in progress.
