JPY - long term bottom ahead?

[scremonini]

I wanted to share a strategic play on the next 8/10 months and hear other people thoughts..

I have very recently started accumulating long positions on JPY against a basket of currencies including AUD, USD, CHF, CAD.

My line of thought is to take advantage of the current weakness of JPY (lowest levels in 20 years) to build a large position going into the end of year massacre.

I believe JPY has a good chance to shine in times of market turmoil and decline of commodities and other asset classes, therefore I think the risk to reward odds are in favor.

Re Macro data Inflation in Japan is still <1%, rates are still negative (currency can't price in anything worse) and growth is just above 0.

Any takers?

[chippermon]

I disagree. The BOJ has recently spoken out about it's intention to not raise rates by saying they are to stay the course. This leaves a big policy divergence. Especially if the FED starts aiming for 2%. It looks like it (USD/JPY) is breaking out of a very long term consolidation. it's been hot but I see it coming back to 124 then start to fill in to 147 - 150. I will look for consolidation there then maybe a breakout upwards.

AUD/JPY looks great too. I would like to see a pullback to 94 then party on. Haven't really been tracking the CAD or CHF crosses.

[SOL]

The monthly chart of the Japanese Yen



Usually one could state that a solid long term reversal was imminent. However, with the current geopolitical and manipulative situation (market manipulation is at a level never seen before), the Yen could rally but unless it breaks through the fortress of resistance shown by the brown straight line, the rally will falter.

Having said that the USD is due for 2-3 months top possibly as much as 6 months, as it has rallied strongly. This consolidation could help the yen. But the USD could spike to the 102 to 102.80 range before consolidating.

Taking a longer look
So after the 2-3 month top (possibly as long as 6 months) there is a high probability that the USD could trade to an all-time new high before it puts in a multiyear top, but this could turn out to be a multi-decade top.

[scremonini]

Correct, thus the market is probably pricing in negative rates and continuous accommodating policy from BOJ.

However is the depreciation continues the BOJ can either intervene in the market strongly to back the currency or change policy as further depreciation would damage the economy making negative rates uneffective.

Yes, it's risky in the short term, but I do see enough upside reward when things turn around or the crash in the 4th Q occurs.

I disagree. The BOJ has recently spoken out about it's intention to not raise rates by saying they are to stay the course. This leaves a big policy divergence. Especially if the FED starts aiming for 2%. It looks like it (USD/JPY) is breaking out of a very long term consolidation. it's been hot but I see it coming back to 124 then start to fill in to 147 - 150. I will look for consolidation there then maybe a breakout upwards.

AUD/JPY looks great too. I would like to see a pullback to 94 then party on. Haven't really been tracking the CAD or CHF crosses.

[SOL]

Correct, thus the market is probably pricing in negative rates and continuous accommodating policy from BOJ.

However is the depreciation continues the BOJ can either intervene in the market strongly to back the currency or change policy as further depreciation would damage the economy making negative rates uneffective.

Yes, it's risky in the short term, but I do see enough upside reward when things turn around or the crash in the 4th Q occurs.

I disagree. The BOJ has recently spoken out about it's intention to not raise rates by saying they are to stay the course. This leaves a big policy divergence. Especially if the FED starts aiming for 2%. It looks like it (USD/JPY) is breaking out of a very long term consolidation. it's been hot but I see it coming back to 124 then start to fill in to 147 - 150. I will look for consolidation there then maybe a breakout upwards.

AUD/JPY looks great too. I would like to see a pullback to 94 then party on. Haven't really been tracking the CAD or CHF crosses.

You have to be in it to win it and the old adage also applies no risk no gain. So as long as you feel comfortable with what you are doing, don't let anyone stop you. Pioneers face obstacles followers cannot even envision and that is why they also have the chance to lock in gains that the masses can only dream off.

[Tobeornot]

I will take the easier route for now. I will wait to see if the Yen can break through resistance, but the better trade is to wait for the dollar to pullback and then I will go long via UUP Calls.

[Yodean]

*****

World's been drinkin' the Dollar Milkshake a bit, now bloated and full - USD should consolidate at current levels with bearish bias.

Very worrisome rumbles in the yen market - this topic is not getting enough press, imo.

Yen going down big, followed by yuan going down big, Euro is already doomed ... King USD forcing everyone to bend over, soon enough, except for BTC.

As always, NFA!

[AstuteShift]

Weekly chart on USD is overbought, once it lets out some steam then the yen should be able to recover.

However, I’m more interested in the Nasdaq, opportunity there is enormous