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Foreign Currency, Discussion
early birds
post Posted: May 30 2012, 12:38 PM
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Nikkei…Negative Surprise But a Buy Into Summer Low!

By completing a major bottom and on the back of the long-term trend breakout in the USDJPY we have been quite bullish

on the Nikkei in Q1 and given the trend reversal in the USDJPY we said that the impulsive Q1 bull leg should be just the

beginning of a new major bull cycle, in which the Nikkei should move into a systematical outperformer versus the world.

Keep in mind, the breakout in the USDJPY we saw and still see as the beginning of a 4 year lasting bear market in which

the JPY should lose at least 35% of its value. This call remains unchanged as long as the JPY does not break 76, which

represents the early February reaction low.

However, following our macro view by expecting a new risk off leg into summer we anticipated a new but final

down leg in US yields into June/July. From a correlation standpoint it was clear that this could provide at least a

temporary negative surprise in the USDJPY and also in the Nikkei before we should see a new bull leg starting in

the Japanese market. Tactically, we warned about chasing Japan higher in our March 20th weekly comment. After

completing an impulsive wave 5 sequence we basically expected the Nikkei starting a longer lasting correction into

June/July. At the end of the day the magnitude of the current correction leg has been a surprise for us, since the bounce

attempt in late April completely failed. However, as long as the Nikkei does not break its November low at 8135 this does

not change the strategic picture of the market



Conclusion: The current correction in the Nikkei is stronger than expected but with heading into June, the

Japanese market is moving into the time window of our

low projection that we gave out in late March. From a

cross asset class perspective, and in line with our 2012

strategy, we see US bond yields on the way into a major low

this summer and in this context we see the USDJPY

currently forming the right shoulder of a major inverted

head & shoulder pattern. Consequently, over the next

few weeks we expect both the USDJPY and the Nikkei

moving into a major long-term buying opportunity. On a

short-term basis into June we still see the opportunity to

overshoot towards 78/77.50, whereas a daily break of 80.50

would be initially bullish for the USDJPY. The Nikkei we

expect re-testing its November/December bottom but our

key call is unchanged. We are looking for a major

reversal in June/July as the starting point for at least

another strong tactical rally before into Q4 we could see

a new litmus test on the downside, which however we

wouldn’t expect to make new lows.
=============


from UBS.



 
early birds
post Posted: May 30 2012, 11:36 AM
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In Reply To: early birds's post @ May 29 2012, 03:38 PM

not sure what is going on with so much strength in JPY.
my stop got hit again! it looked so good yesterday. didn't take profit{ thought it will go pass 0.79}
oh well, gonna watch it from the fence now!!

 
early birds
post Posted: May 29 2012, 03:38 PM
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In Reply To: Dave_vic_ozz's post @ May 29 2012, 10:59 AM

thanks for your kind lucky word Dave
AUD/JPY charging up to two session's high at near end this session.
looks i'm on the money with this trade!

 
Dave_vic_ozz
post Posted: May 29 2012, 10:59 AM
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In Reply To: early birds's post @ May 29 2012, 10:54 AM

QUOTE
i'm on the trade again long AUD/JPY will hold over night if not stop out!



I hope it works out. I am sure it will as you know your stuff. smile.gif



--------------------
My comments reflect the moment in which they were posted.
Everything can change, and usually does, without notice.
 
early birds
post Posted: May 29 2012, 10:54 AM
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In Reply To: Dave_vic_ozz's post @ May 28 2012, 07:28 PM

I don't rule anything out these days. It might just hit $0.60 and bounce to $1.70 smile.gif
=========================

yeah Dave, one can never rule anything out in this market, but chance for that shit to happen is similar to win a lotto.


i'm on the trade again long AUD/JPY will hold over night if not stop out!

 
flower
post Posted: May 29 2012, 09:43 AM
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The dollar is proving scarce, even after the Federal Reserve flooded the financial system with an extra $2.3 trillion, as the amount of the highest-quality assets available worldwide shrinks.

From last year’s low on July 27, the greenback has risen against all 16 of its major peers. Intercontinental Exchange Inc.’s Dollar Index surged 12 percent, higher now than when the Fed began creating dollars to buy bonds under its extraordinary stimulus measures at the end of 2008


http://www.bloomberg.com/news/2012-05-28/d...r-stimulus.html





--------------------
Combining Fundamental comments with Fundamental charts.
 

sentifi.com

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Dave_vic_ozz
post Posted: May 28 2012, 07:28 PM
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In Reply To: early birds's post @ May 28 2012, 04:54 PM

EB,

3 weeks ago there was not a hope in hell a Grexit could occur.
Just a week ago a Grexit was all be ruled out by the leaders of the EU.
This week it is on everyone lips as the only solution.

I don't rule anything out these days. It might just hit $0.60 and bounce to $1.70 smile.gif



--------------------
My comments reflect the moment in which they were posted.
Everything can change, and usually does, without notice.
 
early birds
post Posted: May 28 2012, 04:54 PM
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In Reply To: Dave_vic_ozz's post @ May 27 2012, 02:30 PM

jumped in this morning, but it traded very tight range all session, so i got out. but it looks going to rally at night session now!
really pisssed me off weirdsmiley.gif
still think it is good carry trade though!!

by the way, forget about AUD 0.60 to USD dave. RBA will step in big time long before it hit 0.60, they wait for this chance to re-banlance their currency, and make sure AUD won't swing so wildly. but market seems wo'nt give them this opptunity!

 
Dave_vic_ozz
post Posted: May 27 2012, 02:30 PM
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In Reply To: early birds's post @ May 25 2012, 04:45 PM

In the last 24 hours I have seen experts quote the AUD / USA at either 0.60 and this morning on the ABC at $1.70

Then Lagarde calls it time for Payback on Greece and other EU delinquent economies.

Roll the dice EB, roll the dice. smile.gif



--------------------
My comments reflect the moment in which they were posted.
Everything can change, and usually does, without notice.
 
early birds
post Posted: May 25 2012, 04:45 PM
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hi guys

i've been watch AUD/JPY for two days. really like to take a long position here, but not guts enough to pull the triger.

what do you guys think?? kinda like this old carry trade at current level!





 
 


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