USD/JPY: Market watching for daily close below 200-DMA (worth 530 pips?)

  • Obviously all charts have slightly different data but the ones I’ve seen have the 200-DMA coming in between 97.22/26;
  • A daily close clean below there would be seen as a very bearish event;
  • Goldman Sachs estimate that the average move on a close below/above the 200-DMA is 530 pips.
  1. Morning Sean, sorry to sound like a dumb blonde, but what did goldman sachs generalized statement mean, they believe that if we close below the 200 DMA, we could go down 530 pips? 530 pips up i can believe, and i am still a bear at least till 96.6 minimum (at that point i would have to sit back and plan my next move) but does this mean they see 93 range as a possibility?

  2. Well, i would love to see that happen as a Usd/jpy trader, we all know sooner or later even if it takes months we should break 100 and just keep going up, im just waiting for a perfect setup and starting point, and who knows, ever dog has their day, they might just be right… Whats your thoughts Sean, will we at least make it below 97 this week?

  3. “we all know sooner or later even if it takes months we should break 100 and just keep going up”

    When everyone thinks the same way like this is a big warning sign that things may be about to change, and in a nasty fashion!

    I’m still well long USD/JPY myself. I hate the yen, but the dollar is hardly impressive at the moment with the ridiculous monetary stimulus policy that is being perpetuated there and the policy gridlock. There had been expectations that it would start to be unwound, this had supported the pair in recent months I feel.

    Now if we take stock, Abe’s 3rd but most important deregulation arrow has yet to really be fired, and suddenly expectations for the FOMC to start reducing the amounts of economic heroin have been rolled back. The US economic data has been nothing to get excited about.
    If this is the case QE3 might just continue on for as long as the BOJ’s own crazy QE experiment?

    That all said, the yen does seem to weaken towards year-end, and yen bears have made enough easy money the last year to be able to take a wait-and-see approach for a while longer. While I am tempted to wind down my positions and call it a year, we may be going through what should be viewed as a longer term buying opportunity. I think the US has better economic potential than Japan. But potential is nothing unless it is eventually fulfilled.

  4. Interesting Fxgai that the eternal bull is having 2nd thoughts. I’m hearing some very interesting flow info from Japanese banks which suggest that it will have a lot of difficulty rallying very far. One bank sold around 1.5 bill every 10/15 pip between 9775 and 9900. Mightn’t be a bad idea to take a few months rest from the bull train ??

  5. Yeah, the bulk of my position was built on the 80 handle, so it’s still nicely in the black. It’ll be a case of “leaving profit on the table” if it does go back above 100, but I can’t complain. It’s been good to me. I really do think the yen is going to go down the gurgler so long as things keep going the way they are, but the dollar is just not such a feasible alternative. Nothing is 🙁
    Time I become a farmer I think!

  6. you are a wonderful long-term position trader on usd-jpy. If 96.50 swing low is closed off. Then, u-jpy bullish picture may end. BoJ targeted yen in 90 to 95 zone in last year when it jumped off. Now, the market gave BoJ 101 to 90 (50% fibo) —- a big range. 93.50 (38%) to 101 is also a possible range for BoJ. For historical levels, I use 122, 101, 80. If u-j fail at 101, then, high odd, u-jpy may drop back to 80 level. If triangle hold up, then, u-jpy will run its wave 5 to overcome 101 level for 122 level in the cases of (1) Japanese export business woe continue developing, or (2) they select a war with China, or (3) Japanese bond market crash, deep debt crisis, default debt, nobody buy their debt, or (4) ……

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