21 January 2013

USD/JPY : If BOJ Disappoints Tomorrow ...

  • Updated Fibonacci levels for the pair : [23% 87.14] [38% 85.23] [50% 83.68].
  • Unlike the previous instance when, on 15Jan I had planned to be very patient, but changed my mind the very next day, this time I think  "watchful waiting" must be adhered to if BOJ does not deliver on 2% inflation target + open ended QE tomorrow.
  • If we get a deep sell-off (eg below 87.78), the market is not going to bounce back immediately to make new highs. So :-
  • Either stay long now and hope for the best tomorrow (ie NO buy rumour sell fact price action + obviously BOJ toe-ing Govt line).
  • Or be square now + do not rush to buy into weakness any time soon. There's plenty of time to buy cheaper later. [Me].
  • Shorting's not for me. I will not go against the strong weekly uptrend.


Taichiseal said...

Broke my trading rule. Sold @ 89.96 after BOJ announcement. Told myself it's a day trade.

Taichiseal said...

BOJ :=

1. Set price stability target at 2% in terms of yoy roc of CPI.

2. Asset Purchase Program would now be open-ended.

Taichiseal said...

+88.66. Square now and made sure it stays a day trade.

Better stick to system = wait to buy lower.

Even though I am sure its going lower first from here, I must avoid flipping long and short and end up confusing myself as to what my real intentions are.

Taichiseal said...

From RBS :=

"Some jostling has begun in the currency war debate ahead of the G20 meeting in Moscow in mid-Feb. Japan has faced criticism from abroad over the recent rapid weakening of the JPY supported by its government. Japan's MoF Vice Minister Nakao hit back saying, Bank of Japan actions are ''aimed at ending persistent deflation, so criticism that it's a form of competitive devaluation is misplaced," and. "Recent developments toward a weaker yen reflect the yen's correction phase from one-sided and excessive gains until last year." He further said, it shouldn't be regarded as a problem if monetary policy aimed at ensuring domestic economic growth and price stability has a "certain impact on the exchange rate." "It's positive for the global economy for a nation to gain growth and achieve price stability by its monetary policy." (quotes from Bloomberg news)

These comments suggest a new type of activism in Japanese policy makers. No longer are they just talking about discouraging excess volatility and speculation in JPY. They are prepared to bat away international criticism and justify the weaker JPY trend."