Some snippets from conversation on the currency pair USD/JPY from the Members Site, as I see it as valuable information for all.
**Watch it trade along side risk here as……USD/JPY has only managed to make it “back to the top of it’s range” while the SP 500 as well Nikkei have rallied to complete a total retracement of the move lower last week.
If that’s the best USD/JPY can do….”now” with markets back near the all time highs….you’ve got to question what it’s got left in it.**
**USD and JPY both represent the two “base currencies” currently being printed at alarming rates.
These are considered “funding currencies” as money is borrowed on the cheap…and in turn “invested” in assets ( U.S Stocks for example ) where “yield can be found”.The comparison of the two throws many for a loop….and as a currency pair it’s a tough nut to crack without broader understanding. The last piece of this puzzle rests with JPY.
As risk comes off ( I don’t care if it’s tomorrow…but in general ) all those investments “funded” by cheap JPY bust…..and the money flows back home.
Like a tidal wave….all the “free money” suddenly comes out of “all easy assets funded by it” – and comes racing back to it’s place of origin.**
**Nothing can stand in the way of this as the trade is “so massive” that it’s movement overtakes / over shadows all other movements in markets. U.S Bonds are sold, U.S stocks are sold, Australian and NZD Dollars are sold….EVERYTHING funded by cheaply printed JPY is sold as the elastic band “snaps back” and JPY is repatriated back home. The BOJ has printed , devalued , intervened MANY times before this ( although not on such a desperate scale ) and every single time…..I’m talking EVERY SINGLE TIME – the same result.
It doesn’t work….it won’t work this time.
Only thing is…..with such desperation – it’s already gone on far longer than one would imagine…..hence.
The disaster / BANG we’ll eventually see when she “once again”….does what she always does.**
**USD/JPY “IS” the market ( as per my entire trading thesis since you’ve followed ).
Seeing it “top out” back in January “WAS” the top of the market and this entire summer has merely been “retail distribution” as the big boys ( and myself of course ) plot our way towards the next “real move”. Watching USD/JPY fall thru 101.20 will mark ” the beginning of the end ” in global risk…..as ALL THINGS will follow suit.
A valuable observation / consideration for one to take forward.**
Obviously much more info available in at the members site, should you be so inclined to “broaden your horizons”.