usd/jpy

considering extreme illiquid conditions
i am waiting for a retest of the breakout
only then i am long again

btw
using 400 (or anything above 100) leverage is a clear sign of rudeness toward your forex investment

Pros and cons, eh. So how about all currencies becoming one, abolition of markets, and basically no more trading job? These are some utopia style rethorics but from strictly your perspective you should be all against abolition of the currencies and loss of sovereignty... Or so it would seem to me.

Let me just say EUR/GBP 1.50 or so in 2009 (pace accelerating in 2Q and 3Q) which will become a prelude to what you've mentioned.

Your base-case scenario on EURGBP is for a 57% move to the upside by Q3 2009. I cannot believe you are serious. If so, you must be very new to trading (nothing wrong with that). But please be very careful placing any trades on extreme forecasts such as these, which are based on some gut feeling you have, rather than any quantitative measure. Trade more based on what you see happening, rather than what you expect to happen.

Anything, of course, is possible in the financial markets, but a 50% move in six months would probably imply the bankruptcy of the UK, with unprecedented emergency financing needed from the IMF. Do you think the eurozone would sail on unaffected if the UK, one of its key export markets, went down in such a way? Please consider the highly correlated nature of the global economy, meaning that if the UK was looking this bad, then many developed countries, including weaker members of the currency union (read Greece, Italy and Ireland), would be in a far worse state. This would also mean many eastern european economies, those heavily financed from banks in the eurozone, going to the wall - what would this do to the appeal of the euro?

In such an extreme outcome, do you seriously believe the ECB would consider allowing a near-bankrupt nation, with gigantic public sector debt to GDP ratio, to enter the currency union and jeopardise whatever remaining credibility is left?

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When the facts change, I change my mind. What do you do, sir?

John Maynard Keynes

common guys
someone else might be reading those posts too

eur/gbp at 1.1 is considered extreme
(rate differentials are quite soon to be equalized, dont forget that)
anyway
you can not compare uk to iceland
i expect this GBP weakness to go not longer than the 1st Q
and my first candidate to run away from the recession is not us, or japan but uk, everything is at their favor now

gods of the reason please bless andruha with your wisdom
he is lost in the wilderness of the dreams

sorry for interrupting your conversation
but i trade eur/gbp almost exclusively

You and me both, Arthur!

I am based in London and have a reasonably well informed handle on the economic and political outlook of the UK economy, which is why i responded with such incredulity to the outlandish forecasts made by another poster.

On a different note, it's a shame there is not a discussion forum just for this pair, but i guess the GBP/USD forum woud provide a more suited home for such discussions, rather than this USDJPY thread.

Now signing off from this thread!

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When the facts change, I change my mind. What do you do, sir?

John Maynard Keynes

There will always be a market to trade, otherwise we would not be a market-based economy. Democracies can't really be sustained without them.

The more choices (with high levels of liquidity), the better.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

I think it is fair to say that USDJPY has confirmed a break from its steady bear trend. Now we have to determine 1) is this a retracement or trend change (a long-term question that will not have an answer for a while) and 2) whether the momentum on this break will sustain itself in a steady rally or we will see some congestion and broad basing (like in GBPUSD).

Anyone out there have any opinions?

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

IMO I believe USD-JPY hasnt hit its low.

It has broken its current bear trend lines but I still believe this pair to be headed downward. According to EW isnt this pair still due for new lows?

Risk appetite is on the rise and we see the USD/JPY headed toward resistance at 96.11 the 38.2% Fibo extension of the 110.69 - 87.13 decline. A break here will leave 97.50 at former congestion as the next level of resistance.

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John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

That depends. What is the count you are looking at. I'm sure there are some debates on USDJPY to both sides of the market in the elliott wave thread.

I can certainly see support for you suggestion that this may be temporary. This is indeed a break from a very mature trend; so a retracement and stabilization were high probabilities - just like the reversal back on October 27th.

On this outlook though, what would you consider to be confirmation that the dominant trend is still in place and at what point would you consider your scenario negated? I'm thinking a confirmed push above 96 would be a big step as it was the previous swing low from March and represents the first push into Fib congestion pulled from the recent downleg (beginning back in August).

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

It's interest (and odd) that risk appetite is on the rise considering fundamentals are arguably in worse shape now than they were back through the fourth quarter of last year. Perhaps more interesting is that the dollar should be the source of this yield appetite when it was a safe haven target just a few months ago.

This has led me to wonder, is this a genuine rebound in risk appetite and has the dollar's position in the scheme of the market changed? If the answer to the first question is 'no,' then the second will be 'no' as well. If fear and deleveraging return, investors will turn back towards capital preservation, which finds Treasuries (thereby the dollar rises in this scenario). However, Treasuries may not be the harbor of choice for bleeding fund managers forever - especially if the government takes their quantitative easing policy seriously.

Regardless, for USDJPY the yen will likely maintain its stature as the foundation for risk aversion, though the fundamental arguments behind this are rather obtuse at this point.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

The movement in USD/JPY is quite interesting. Japan stated a few weeks back that they will "re orient" the flow of funds in favour of USD, but this is the only reason I see for JPY to be losing out. I would suspect that given both economies are deteriorating the USD/JPY movement should be arbitrary. Perhaps given fundamentals a wide range should develop of 90-100 for the next month of so. Once the year end in Japan comes i expect further USD strength but before then maybe it's best just to trade based on charting...

I was thinking the same thing, any solid break of 96 I would consider the trend being changed. Im not around my charts on this computer so I cannot post them right now, I believe 96.34 is my exact bias change. Don't quote me till I get back to my charts and can double check that level.

Personally, I wouldn't consider the trend done until the 61.8% is taken out at 101.65. It is typical for this pair to retrace to a 50% fib, top out, and resume the longer term trend. 110.60 was a 50% retrace and 100.50 was a 50% retrace.