AUDJPY DAILY CHART — 100.80
No change to what I posted this morning where I pointed out the 100.80 breakout level that needs to become support to open the door on the upside.
The move above USDJPY 155 has eased some of the pressure on crosses to absorb the JPOY selling but is still one path of least resistance.
USDJPY 4 HOUR CHART – A LESSON TO BE LEARNED
I learned a long time ago that you can not rely on central banks to protect your position. The trader landscape is littered with blown accounts by those who bet on central banks.
So, the question is whether this is another one of those times with the BoJ being called out on its intervention threat as USDJPY trades through the next presumed line in the sand at 155.
With 155x now taken out, this is the only level on a chart that has any meaning as USDJPY trades to a new 34-year high.
So, 155 will determine whether the market will push higher into uncharte3d waters.
Many new traders have not experienced intervention and even those who have traded on this event, it pays to have a refresher to see which type tends to be most effective. I call it an intervention primer.
I do not believe the BOJ will make the same mistake they made before (intervening on a Sunday-US evening seeking maximum effect in lower liquidity conditions). I do believe after they intervene the market will go right back to buying Yen pairs, especially AudJpy and UsdJpy due to rate differentials and Aussie economy, but not until a lot of damage is done. The rest of this week is not a good time to be long Yen pairs even if purely from a risk management approach.
UsdJpy and EurJpy have been inching up slowly overnight because Japanese officials noted yesterday that they would be seriously reviewing Yen in their upcoming meeting. In my opinion it gave the market a green light to inch forward. I observed but did not join. Would common sense dictate perhaps that is not a good idea after today’s US session?
Options on S/P are in the middle of value on the updraft although prices are showing a decline from highs, so it would take quite a bit of pressure (I do expect some) to change the bid bias. Dow volume ratios are right in the middle of high and low parameters and so the bid is still in play even with a decline similar to S/P. Advancing issues vs declining issues are low and have a bit of room underneath. So the bottom line is the bid holds, I wouldn’t be sold on the selling changing the course yet.
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