That is a big problem for serious traders - it's really hard to build a community of support since few people are dedicated enough to take it serious. And, often times, those people that are viable options aren't successful enough to help us along or they don't like to share knowledge. On the other hand, we are getting more FX traders out there so the likelihood of coming across another trader is growing (of course this could be like another dot.com thing). At the same time we are seeing some quality groups like the one Rob Booker has built.

As for the high yielders, we did see a sizable pull back yesterday; but I'm reserving myself for a position in the yen crosses (which are inextricably linked to equity benchmarks). Perhaps if we get another momentous sell off this morning, I'll put in some short orders below support on GBPJPY. EURJPY is a maybe as well under 165. But my targets will be very small since I still have that upside medium and long-term bias. I'm probably going to steer clear of AUDJPY (which has made some new highs recently) and the CHFJPY, CADJPY, NZDJPY group as the levels don't look very clear to me. The Swiss crosses are a different story though. I'm going to start looking through those.

Hi John,
Where will you look to enter the Swissy? 1.1007 or 1.1303?
I agree with your sentiment about the Yens- they will be under pressure soon as well. But not because of the flailing Japanese economy.

__________________
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YTD +5%

Looks like we might have weak support around 1.1480 and a more serious floor through at 1.1250/80 (the latter comes on the major swing low December of 2004). However, if we get down to 1.1250, I wouldn't try to bottom pick on a double touch, I'd just stand aside as it will probably push through just like GPBUSD, EURUSD, USDCAD, AUDUSD, etc.

Realistically, we need to see a change of momentum before I consider that pair. Perhaps a small position with a modest target when the falling trendline seen across the 4-hour, 8-hour and daily charts is broken. But until I get a serious change in direction, mixed with a rebound in the dollar across the other majors, I'm not going to try to buy.

After a few months of being a normal New Yorker and working days, I've come back to the "euro" shift and am now getting reacquainted with the price action we typically see at these hours. I'll be keeping an eye on some of the short-term action in USDJPY. I suspect it'll hold pretty tightly to the 114.50/90 region over the next few hours.

USDJPY has edged below short-term trendline support, and with hourly oscillators looking bearish the pair may continue to ease lower.

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That looked like a good break, but it looks like we are getting no volatility to back the move up. While I didn't expect anything from the economic side, I'm surprised we haven't had more pressure from the equities drop. On the other hand, if we get a real correction in the US (and subsequently global) benchmark indexes, we could see USDJPY take out 113.25.

Right now though, it looks like this pair is in technical no man's land. I'm seeing nothing on the medium and long-term charts. You could try for 20 points on the short-term, but there are no solid horizontal support and resistance zones and trendlines are overwhelmed by choppy price action.

Terri, you think we should be looking for a new direction in the medium term? After all this dead price action over the past two weeks, I'm thinking we might find a big continuation move on the mid-October drop; but that would likely be akin to forecasting a new down leg in global equities.

63% of retail traders are long USDJPY (long to short ratio is 1.70). Moreover, since last week, retail has been aggressively buying USDJPY (long positions are up by 20.2%). In the past, when retail was long and buying more, the USDJPY has sold off in the following days. The SSI gives us a STRONG SIGNAL TO SELL USDJPY.


Source: FXCM Dealing Desk

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...903946044.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

Carry Trade Holds Strong

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Looks like the Yen eased its gains on the day on the heels of a sharp improvement in domestic stock indices. So far it's held the 114.00 mark with ease. But recent trends suggests that a break below may be imminent in the coming days of trade.

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Honestly, after the extensive moves we saw in early/mid-October, I think that we will continue to see this sort of sloppy, non-directional price action. This could also be a good opportunity to seek out range trades, though, so not all is lost.

I've attached daily charts of the Dow and S&P...as long as those indexes hold above critical support near 13,550 and 1,500, respectively, I think we'll likely see carry trades remain at least somewhat bid.

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Well, as long as equities can hold their highs (difficult with regulators holding back Chinese investment in Hong Kong and Western Banks coming out with continuous write offs), I think USDJPY should bounce back and forth between 114 and 115.50/116. There are no top-tier economic indicators on deck, so it will be more difficult for the market to build momentum for a major directional move. Of course, with volatility across the other asset classes still very high, I'm not going to leverage myself into placid range trades.

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The ratio of long to short positions in the USDJPY stands at 1.52 as nearly 60% of traders are long. Yesterday, the ratio was at 1.72 as 63% of open positions were long. In detail, long positions are 3.9% higher than yesterday and 17.8% stronger since last week. Short positions are 17.4% higher than yesterday and 0.5% weaker since last week. Open interest is 8.9% stronger than yesterday and 20.0% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

Source: FXCM Dealing Desk

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...903946044.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

USDJPY has taken a hit off of Chinese comments that they would diversify into "stronger currencies." With much of China's $1.4+ trillion in FX reserves speculated to be held in US dollars, the markets have not taken the commentary lightly. USDJPY has targeted support at 113.80, and while the Chinese official has clarified his words and said he didn't mean for the markets to buy Euros, USD has yet to show much of a recovery.

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The Chinese story now becomes the yen story as dollar yen will get huge speculative flows on assumption of looser yuan peg. The yen which up to now only strengthened on anti-carry flows may now target 110 if the Chinese expedite their peg plans.

USDJPY obviously broke through support to target 113.00, and we're seeing the other yen crosses fall back as well. If we have a nasty day on Wall St., these declines may only be exacerbated.