USDJPY War

3 мая

"Japan faces a tug-of-war with yen bears" says the recent Reuters article on this topic, which has had a lot of articles in the recent buildup to the BOJ intervention. What it basically implies is that professional traders have embarked in a money making roller coaster pushing the USDJPY higher knowing full well that the BOJ will step in and bring it down triggering their sells. Because of the interest rates difference some are still expecting a lot of market participants to be on the other side of the BOJ position, especially as it is estimated by some that 59 billion $ were required just for this intervention alone.

I am not convinced. I don't see a big case for another Bull Big Push, and I developed a set of levels for potential support and resistance zones in a more bearish tuned scenario. At least until June. This also has a correction from the drop scenario factored in, with a potential resistance zone near 157.5 at the long green plank.

Nothing is set in stone and I wouldn't promote hear a precise approach, strategy, bias, or tactical manoeuvre, but I would pay close attention to the price action at the zones highlighted in this project. Consolidations, breakouts, reversals, all scenarios are to be considered, and to keep an open mind and be free of prejudice and bias, we can also consider more BOJ contrarian scenarios, as long as relevant price action related events occur at any of the shapes.

3 мая

Заметка

First sign of support at the blue which is a good indicator of potential things to come in this project. Hopefully this is not a black swan event and we will get to see more of this. Regarding this specific setup, it comes after a steep fall and while this doesn't invalidate the prospect of a higher momentum push above, for more cautious bulls a corrective and a second entry setup for a long could be more ideal. On the other way around bears in case they are out there hunting are just waiting for the weakness to appear after a climb, or after a corrective formation, ready to pounce and consolidate the yen even further. That being said, I don't know if we will get to see the green touched, but a second tap with a rebound on the blue would be interesting.

8 мая

Заметка

Seems like the bulls are in charge for now even though the BOJ has issued another warning. Not convinced that they will intervene again even if it reaches the green zone but looking forward to see where this buying appetite weakens.

17 мая

Заметка

Never got to touch the green before the bears got it it. Wars seems to continue in this market with the bulls pushing it toward the first small orange with some weakness in this area. The scenario where the bears won't be able to win over and push towards the red should be considered. Second orange zone could rebound this.

23 мая

Заметка

There is the potential of a withdrawal from the green rectangle if this proves to be relevant as resistance. Another scenario would be a break of this level, after consolidation under it and popping out once the zone ends. I am leaning towards the more bearish tones in the near future, but so far there are no relevant price action signs to indicate this potential tendency.

4 июн.

Заметка

Not quite at the green but in its price range level. Yen is gaining ground all across the board...

6 июн.

Заметка

BOJ talking today about bonds. Will they let the yen slide even more? The comeback against the yen from all major currencies could be a sign that everyone is just jumping to go long at any dip. Bearish mood diminished unexpectedly fast.

20 июн.

Заметка

Either the BOJ lost this war, or it just recalculated its priorities for a different path. Here it is, the market reaches the potential previous estimation, from where all bets are off. Could go higher, could touch the green rectangle left below, but I really can't assess where/ how/ and even why, this could go into the future.

27 июн.

Заметка

Red alert today with the first of another potential set of warnings from Japan against further yen weakness. Long holders should probably carefully prepare for any potential bearish scenarios, even though any intervention could easily end up like the previous one, keeping the yen in a box while not scaring away the yen bears.

11 июл.

Заметка

Just on the day Reuters had a piece asking why the BOJ hadn't intervene, next comes the intervention. Or so it seems. We end this project with the last bias / projection/ estimation for a potential further descent towards 155. Overall it doesn't look good for the BOJ and the yen considering the carry trade issue, but still, there is some room for a stronger yen in short term.