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JPY outlook: Time for the bears to take over again?

  • Wedge pattern in USD/JPY won’t hold forever (see chart) and I expect it to break higher;
  • EUR/JPY also in sideways consolidation whilst potential double-bottom in AUD/JPY (see below);
  • Heavy risk-aversion has led to plenty of JPY buying in recent days but once this abates we should see plenty of Yen selling.

Risk-reward favours being short JPY against the major of your choice IMHO.

  1. Hi Sean! Don’t know if this is a valid observation: just about everywhere I read expects the USD/JPY wedge to break higher, so the market might just do the most unexpected, i.e. continue range trading or break down?

  2. Very valid Jasper, as we know if too many are on one side then the other side becomes the most likely outcome. I’m not convinced that after all risk-aversion in last weeks that mkt is actually already long USD/JPY, but time will tell I guess

  3. Hi Sean

    I am a little confused when you say Yen buying/selling – Are you referring to the actual Yen itself like a Futures contract 6J? Or are you referring to the spots?


  4. I don’t want to trade u-jpy at moment. July price pattern is a distribution type, imply more drop. August price seem built-up above 96.70.
    But, failed to move above 99.25. Then, expect u-jpy to run 200 dma @ 94.50. More dip may be near 88.85 to 87.40 zone as a butterfly pattern’s D there.
    Tapering does not stop printing $. So, USA status of fiscal, monetary woe is still the same.

  5. Jasper, at the end of the day know one really knows which way this pair will go, but interday trading with this pair is always great and rewarding with a tight spread!

    Sean i went short at 98.4 and closed it at 98.11 easy 29 pips, now at 98.1 i have taken a long position with a tight stop in place, but how high do you think we will go today?

    Nikkei went down to 13400 range but seems like it will head up again for a bit so i thought why not try and make some pips out of it as it drags this pair up with it.

    Anyways if you get a chance please let me know what you think todays interday range might be in you expert opinion.

  6. Hi, Sean! As I mainly use the medium variant of the trade, so consider the strengthening of the yen up until around about December, and only then will begin a good move to weaken the yen. BOJ will start the program from the beginning of the New year 2014, also in December, the clarity come with the new head of the fed. Against this background, the us dollar seems to be to weaken and other pairs (probably not so much), but there is a real possibility of a breakthrough Euro to 1.40 (for example), pound to 1.63, and so forth. Dollar/yen may fall to the level of 90.00, respectively and yen crosses. There are thoughts like me, Sean. How do you look at such development of events? Thank you and good luck!

  7. Very possible Serga, in fact I like the EU 1.40+ and cable 1.60+ scenario but I’m thinking that UJ first rallies to 107/109 in mad rush then retraces back towards 100 while USD weakens against EUR, GBP etc?? But I’ve been wrong before 🙂 Have you been able to log in to chat-room??

  8. Im with you Sean, i think im going to close this trade soon, dont want to get to greedy…. I Think i might get a better buy oppertunity today if i wait a little bit longer! My charts all look indecisive, except for the Nikkei which already is up 50 points as i wanted, still better wait, It is Friday so it might get a bit crazy!

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