USD/JPY What just happened?

[pflantzdog27]

I'm at a loss. What just happened that caused the JPY to strengthen about 150 pips in 30 minutes. Was there a release that I missed? :-0

 

[elitejets]

The indices are falling, CNBC keeps talking about the "head and shoulders" pattern in the indices. Increased risk aversion always drives money to the Yen.

I think the trigger was the story of China cancelling a big coal order from Australia. The world is relying on China to pull us out of recession and whatever the reason cancelling this order was very negative. Very bad news for commodities and commodity currencies too, look at Aussie.

 

[N Rothschild]

add in a load of buy stops at technical levels and voila !

 

[poborsky]

Looks like oil and bank stocks are having a hard time, driving the s&p down, bringing risk aversion into play. Gives me the impression that USD is weak.

 

[elitejets]

The USD is only really weak against the yen. It's having a good old rally vs the continentals (EUR, GBP and less so CHF) and strong also vs the commodity currencies (AUD, CAD, NZD)

Looks like oil and bank stocks are having a hard time, driving the s&p down, bringing risk aversion into play. Gives me the impression that USD is weak.

 

[poborsky]

The USD is only really weak against the yen. It's having a good old rally vs the continentals (EUR, GBP and less so CHF) and strong also vs the commodity currencies (AUD, CAD, NZD)

Yes it is, but its just the fact that the yen is that much stronger in the risk aversion scenario that put the thought in my head. Ive noticed that a couple of times lately when the US stock indices have moved down then the other currencies have stayed strong against USD. Probably other reasons behind this, but I am gonna keep it in the back of my mind.

 

[trader_dante]

I'm at a loss. What just happened that caused the JPY to strengthen about 150 pips in 30 minutes. Was there a release that I missed? :-0

A reputable source most likely said it looked weak and was a good sell.

 

[N Rothschild]

sometimes you go rather overboard with the whole contrarian view..

 

[trader_dante]

sometimes you go rather overboard with the whole contrarian view..

Agreed.

 

[Martinghoul]

Actually, there were a few strat pieces yest recommending selling various yen crosses, specifically USDJPY and AUDJPY.

 

[pflantzdog27]

I've plotted a Fibo retracement on my chart from the high of 110.65 (August 10th 2008) to the low of 87.12 (December 14th, 2008) . Yesterday price action broke the 23.6 level, only to come back up above this level. Now that the 23.6 level (92.50) has shown some support, should I look for the pair to retrace back towards the the the 38.2 level (96.02) or should I look for the pair to put more pressure on the downside and place a sell stop below 92.50?
Will positive 2Q earnings results weaken the yen as investors gain confidence in the recovery and risk appetite increases? I think strong earnings reports will cause the yen to depreciate against higher yielding currencies but appreciate against the greenback.

 

[elitejets]

Actually, there were a few strat pieces yest recommending selling various yen crosses, specifically USDJPY and AUDJPY.

I agree. A lot of the daily candles on the XXXJPY's were bearish engulfing candles (EURJPY, AUDJPY etc).
Price action usually gives a warning ...

 

[justtradin]

The indices are falling, CNBC keeps talking about the "head and shoulders" pattern in the indices. Increased risk aversion always drives money to the Yen.

I think the trigger was the story of China cancelling a big coal order from Australia. The world is relying on China to pull us out of recession and whatever the reason cancelling this order was very negative. Very bad news for commodities and commodity currencies too, look at Aussie.

Well orchestrated head fake as it turned out to be...now let us witness the unwind take place.