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07-02-2008, 02:06 PM
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Join Date: Jun 2008
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Hi John ,
In their analyse, Terri Belkas and Jamie Saettele draw a scenario about tomorrows ECB next hike ; the third scenario particularly confuse me a little bit ; where :
"Scenario 3: +50bps to 4.50%, Trichet Implies That Is It – In the near-term, a 50 basis point rate increase to 4.50 percent at 7:45 EDT would be the most bullish scenario for EUR/USD, as this sort of move would be entirely unexpected. However, if Mr. Trichet were to follow this up at 8:30 EDT with the sort of commentary noted in Scenario 1 (see above "no more hike in a near future"), the EUR/USD would experience heavy volatility and possibly a sharp reversal. Furthermore, the news would be very bearish for European stock markets, which could subsequently lead the Japanese yen crosses lower, led by EUR/JPY, as the Euro-zone’s economies and businesses would experience a significant tightening in credit conditions."
Question :
base on the correlation between EURUSD & USDJPY ; does a rally in the EURJPY pair would draw the USDJPY at higher lelevels as well ; perhaps 107.50 - 108.00 ish ???
Thank you
Chacxjr
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07-02-2008, 06:20 PM
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Registered User
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Join Date: Jun 2008
Posts: 3
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Quote:
Originally Posted by dcarlo5626
okay just did a but at 106.69 i think the pair is going above and beyond 10850/60 even if the unemployment rate is a little above this week. i think the ism survey was enough to get this pair moving tell me what you guys think short term bullish or longterm.
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Hi
I m still relatively new on this playground ; but i think base on the chart , that there is a lot of room for the USDJPY to go south ; and now that we are all on standing by , awaiting for ECB rate hike , Mr. Trichet statement might very well deceive all these official in the EUROZONE , but carry traders will probably be DELIGHT !!!!
Right now i m looking to SHORT at 106.15-20 ish |
07-02-2008, 06:55 PM
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Moderator
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Join Date: Jan 2007
Posts: 1,768
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Quote:
Originally Posted by chacxjr
Hi John ,
In their analyse, Terri Belkas and Jamie Saettele draw a scenario about tomorrows ECB next hike ; the third scenario particularly confuse me a little bit ; where :
"Scenario 3: +50bps to 4.50%, Trichet Implies That Is It – In the near-term, a 50 basis point rate increase to 4.50 percent at 7:45 EDT would be the most bullish scenario for EUR/USD, as this sort of move would be entirely unexpected. However, if Mr. Trichet were to follow this up at 8:30 EDT with the sort of commentary noted in Scenario 1 (see above "no more hike in a near future"), the EUR/USD would experience heavy volatility and possibly a sharp reversal. Furthermore, the news would be very bearish for European stock markets, which could subsequently lead the Japanese yen crosses lower, led by EUR/JPY, as the Euro-zone’s economies and businesses would experience a significant tightening in credit conditions."
Question :
base on the correlation between EURUSD & USDJPY ; does a rally in the EURJPY pair would draw the USDJPY at higher lelevels as well ; perhaps 107.50 - 108.00 ish ???
Thank you
Chacxjr
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Hi chacxjr,
While there is considerable correlation between these two pairs over the long term (you can see the relationship in the charts I attached below), it is more due to the dollar's influence rather than any kind of fundamental relationship between the European event risk and the Japanese yen.
Instead, she is looking for the pair that will have the greatest fallout in terms of volatility from the ECB decision. She suggests it would be EURJPY. While EURUSD would be a popular choice, direction will be very difficult to call with another big unknown in place (NPFs.). With the third scenario, volatility in the euro would pick up and European stocks would plunge on the big hike (as the outlook for revenues sours). This means that you would have euro selling from the decision itself and a secondary influence on falling risk appetite (and therefore carry unwinding) that would lend additional fuel to a EURJPY drop.
Hope that clears it up.
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07-02-2008, 07:21 PM
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Member
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Join Date: May 2008
Posts: 11
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i see what your saying i left my position open at 106.69 i was sure it was going for 107.00 looks like i was wrong. i still might holding my position over night with high hopes that i will see it go up on the Asian session so i can at least make some of my money back if not ill cross it off as another loss. i was actually thinking about buying the eur/usd this morning instead i brought yen bad move but lesson learned. i was actually thinking about opening a sell position on the usd/jpy to make some of my money back tomorrow I'm expecting the NFP to be worse that expected witch if it does either way i will make some money. tell me what you think?
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07-02-2008, 07:39 PM
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Yes ,
Thank you very much !!!
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07-02-2008, 10:52 PM
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Join Date: Apr 2008
Posts: 1,495
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Nfp
Based on the ADP result yesterday, it's reasonable to assume that NFP will be worse than the estimated.
Kathy Lien wrote an article of why she thinks quite strongly NFP will fall worse than expected, it could even reach -100K.
If NFP indeed turns out badly, wouldn't the impact to USD/JPY be catastrophic? I wonder if there's still anybody with USD/JPY long out there? If 105 handle is broken, it could be a free fall. If you're long, make sure to put Stop Loss below 105.
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07-02-2008, 11:28 PM
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Member
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Join Date: Nov 2005
Posts: 300
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Quote:
Originally Posted by Breeze
Took a long USD/JPY @ 108.00
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stll long from
108.23
108.00
107.90
106.00................Closed @ 106.40....Prfts booked
105.08................Closed @ 106.40....Prfts booked
GBP/USD short from
9947..............Closed @ 9880.....Prfts booked
9880
9795
__________________
Warning follow @ own risk...I dont use stop loss I hedge
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07-03-2008, 04:07 AM
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Join Date: May 2008
Posts: 87
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USDJPY in nice rising channel. Long from 106.01 stop at 105.60 (will move that to 105.80 later on) looking for 106.50 and 106.85
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07-03-2008, 06:27 AM
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Member
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Join Date: Apr 2008
Posts: 1,495
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I don't understand why USD / JPY keeps rising when the stock market is clearly in red. Also with the expectation that NFP will be terrible later.
I know that there's already a disconnect between carry trade and equity market, but still, it's strange.
Seems like the rise is fueled by EUR/JPY cross flow speculation.
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07-03-2008, 06:33 AM
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Join Date: May 2008
Posts: 87
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took profits too early at 106.31 and 40
wanted to be out before the data lottery is commencing
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07-03-2008, 09:31 AM
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Member
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Join Date: Jun 2008
Posts: 141
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What's next?
Hi BVL,
Any suggestions for next move in USD/JPY as I have gone short at 106.89? Jamie has suggested that its bearish signal now? Cheers
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07-03-2008, 09:36 AM
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Member
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Join Date: May 2008
Posts: 87
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Quote:
Originally Posted by bvl
USDJPY in nice rising channel. Long from 106.01 stop at 105.60 (will move that to 105.80 later on) looking for 106.50 and 106.85
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updated chart |
07-03-2008, 10:47 AM
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Member
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Join Date: Nov 2005
Posts: 300
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stll long from
108.23
108.00
107.90
106.00................Closed @ 106.40....Prfts booked
105.08................Closed @ 106.40....Prfts booked
GBP/USD short from
9947..............Closed @ 9880.....Prfts booked
9880..............Closed @ 9810....Prfts booked
9795
__________________
Warning follow @ own risk...I dont use stop loss I hedge
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07-03-2008, 12:00 PM
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Moderator
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Join Date: Jan 2007
Posts: 1,768
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Quote:
Originally Posted by cmellon
I don't understand why USD / JPY keeps rising when the stock market is clearly in red. Also with the expectation that NFP will be terrible later.
I know that there's already a disconnect between carry trade and equity market, but still, it's strange.
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The correlation between USDJPY and equities hasn't been very strong historically. Only recently, when all of the financial markets were caught off guard by the subprime collapse and the subsequent credit problems did all risk gauges (carry and equities) start moving in lock step.
The fact that the relationship has weakened over the past few months suggests that overall market conditions are improving. With that correlation out of the way, you are looking at a currency pair that is still near 13-year lows and a benchmark equities index that is coming off a 5/6 year bull market; so perhaps natural market cycles are coming back into play. |
07-03-2008, 12:04 PM
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Quote:
Originally Posted by John Kicklighter
I'm cautious on buying yen right now. There is notable support in USDJPY, EURJPY and GBPJPY that looks to hold up significant trends.
Most interested in USDJPY. Short-term bullishness in the dollar is a little questionable, but I also don't think we will have a major round of risk aversion kicking up either (watch us see another Bear Stearns-like announcement after the market close).
Technicals are pretty straightforward on my chart. If today's candle holds, I'll consider small long. Still holding off on the full size long positions until 108.50/60 gives way.
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Ugh. I put an order around 105.20 a couple of days and missed by a few points.
I may be asking too much from my cautious entries - but they are necessary for my money management rules. May need to reevaluate the ol' strategy... |
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