I went long USD.JPY this afternoon, new 30years low is very attracting, stop at 79.40, even if I got stopping out, it isn't big deal, very small position.
U/J down trend is very strong right now. On the other hand, it's a double bottom on the monthly chart, and it might have some kind of technical bounce... 50/50 chance for the short-term direction. Anyhow, I'm looking to see which side to jump in myself
Strange thing is that USD should have been surging against JPY on the event of great earthquake and nuclear disaster in Japan, but price just moved to the opposite. I guess this has trapped a lot of traders.
Not strange if you take 5 second to think about it. Money has to be brought back to Japan to pay for the rebuilding, this means that there is demand for the Japanese Yen and hence drives the price up.
Be a lesson to me, didn't quite get out 79.4, slippage to 79.11 , lost some money. Well, tomorrow is another day.
Investors prefer Yen and the Swiss franc than the dollar as refuge in the chaos situation these days (Donât forget USDCHF also tumbles to all time low).
I don't think so. The market wanted to trade below those huge all time lows to test the area, hitting stops etc. Now usd/jpy is free to rally if it wants to- and it could be a very very hard rally. This sets up a great risk/reward trade for a long here. We could have a similar 'irrational' short term response to what happened at the start of the banking crisis, before the fundamentals kicked in with a delayed reaction. The dow and s&p both made a new all time high in 2007 despite the bad news already being out- before the huge collapse..
Many traders believed U/J would rally following the great disaster in Japan, citing a list of fundamental reasons. But the market movement seemed to disagree in the first day following the earthquake. And today U/J continued to plunge to new low... Lessons learned.
G-7 to accept Japan forex intervention http://www.marketwatch.com/story/g-...intervention-report-2011-03-17?dist=afterbell