Look for Further Yen Strength, short

Discussion in 'Forex' started by fxpeculator, Feb 7, 2006.

  1. I went along with this guys analysis on his blog and shorted Cable/Yen. He calls himself the Detached Trader. You have to go to his website for his full analysis. Here is what he says:

    Short Cable/Yen@206.16
    Stop placed at@206.50 giving the trade a little room and placed above hourly resistance. Look for Yen to run over the majors again tonight in Asia as carry trades unwind and Yen shorts are further gunned down by aggressive players. As we have seen today, Cable/Yen is where the action is in terms of playing a stronger Yen. Wider spread but potential for 100-300 pip runs intraday which is always tempting. Looking at the charts, last time there was some carry trade unwinding and Yen strength seen in the market, cable fell from 213 to 201 (1200 pips), from 12/13 to 12/23.
    posted by The Detached Trader at 3:23 PM

    Gold Correction may lead to further Yen Gains

    (Click chart to enlarge)

    The above chart shows gold crashing and the yen jumping up through the week of 12/16.

    Last time we saw a mild correction in gold, we saw some carry trade unwinding favoring Yen. We could see some further strength in Yen tonight in Asia. Looking for an entry into a short Euro/Yen short. Also supporting Yen is the recent CFTC data last week showing IMM Yen shorts doubled from the previous week setting the market up for a major squeeze.
  2. OfmY


    Actually, yen has gone down first then gold correction.
  3. look at the chart on his site. This is factual, not a matter of opinion.
  4. OfmY


    Well, in my charts:

    The gold correction started at 12.30GMT (US open)
    Yen correction started at 07.00GMT (EU open)

    Both is "simple profit taking" - for today...
  5. aestreux


    if you notice, oil was first to retreat and lead the yen higher and gold lower.

    that's when i shorted the eur/jpy, but the gbp/jpy is just good, if not better!
  6. I was referring to the Gold correction leading to further Yen gains based on the December correlation which saw the Cable/yen fall 1200 pips within 2 weeks as Yen was strong across the board. Also, Last Friday's CFTC data showed Yen shorts doubled from the previous week setting up for a squeeze. To further add fuel to the fire there is market talk that the zero rate policy by the BOJ is going to come to a halt soon.

    Whatever the case, the chart on that guys chart clearly showed the correlation with gold weakness and Yen strength. You have players going massive in carry trades buying up gold. These trades were unwound in December so yes, gold weakness led to Yen strength. This time I believe gold weakness may lead to "further" Yen strength as Yen already caught a bid from the IMM yen shorts data.

    What did you think of the chart on his site?

  7. short jpy/usd future at .8511
  8. spersky


    BuySell I have been waiting to short the yen futures as well. I have almost a perfect setup for the short with my system. Where did you place your stop?

  9. .8563 I entered this trade when part of the move had already happened--I wasn't where I could trade earlier tonight.
  10. spersky


    I am hoping for another pullback to the .8550 range, so I can go short. I know that may be too much to ask though. I especially like the downward potential and I would hate to miss that move.
    #10     Feb 8, 2006