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USDJPY Drops To Fresh 15 Year Low Of 81.72
The kneejerk reaction in the USDJPY is now threatening to tear off both of Shirakawa legs. After plunging to below 82.00 on the NFP number, the subsequent overreaction continues to create tremors at the BOJ, with the pair just printing a fresh 15 year low of 81.72. Keep a very close eye on this as Kan knows that with every downtick, his termination day is getting closer. Last but not least, cast an occasional glance at the EURUSD as well, as judging by Juncker's comments, there is a very high likelihood of gentle currency prodding (note: not war) over there as well.
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Oh, oh...monetary seppuku time?
Ah-so, so messy, intestines everywhere.
The nips are sure puttin' up a hell of a fight at 81.80. It's like freakin' Iwo Jima. Get the flame-throwers, boys! Burn them dolla's!
http://www.youtube.com/watch?v=VD89Z0_Rav8
(Reuters) - Investors looking to defend their portfolios while a global currency war brews are bringing the equivalent of a knife to a bazooka battle, and the best hope for survival is to duck and cover.
why? a smart mix of currencies as well as commodities is doing me fine.
Dollar down - Stocks up!
Jobs lost - employment the same!
All is good!
And we're supposed to believe that gold, after spiking on the jobs report, is now tentative.
I smell smoke.
Good nose. Japan turkey and switzerland just threw themselves into the golden volcano and everybody else inhaled the smoke deeply.
And now britain is heading in. Stiff upper lip and all.
And now south africa comes in for a punch or two.
HERE COMES DOW 11,000!
Whith dollar collapses like this, theyre very busy to keep their junk equities rocketing up just to keep parity! This game wont end pretty.
There's going to come a point where US assets (stocks) will be spurned even if the dollar is going down because people are aware the only thing keeping them up (despite, for example, less than brilliant Alcoa results) is the potential for QE2 not any good fundamental reason.
Let's not forget the foreclosure mess, the fact that banks are STILL sitting on toxic assets marked to fiction, the Feds own the SECOND largest holding of Treasury bonds, Fannie and Freddie own 90% of US mortgages, etc, etc.
Healthy? Errm, no...
DavidC.
I think today is the day.
Dow 11k is the target, the other indexes be damned. If they can break 11k today then they've got control of the wheel for a few days/weeks longer.
If it doesn't crack 11k... watch out.
1st attempt- *fail* Now they have to try another 50 point ramp which is looking like the top of the Widowmaker hill where even nitrous 1,000 cc bikes get face palmed.
More like an ant hill. Done.
Chart: USD/JPY
Ah com'on Timmy...will you stop fucking around with my chart?
http://99ercharts.blogspot.com/2010/10/usdjpy_08.html
this is gonna get u-g-l-y!
EUR/USD ping ponging away in a 130pip range, that was a good day. Good clean fun.
I'm calling a temporary bottom here for the USDJPY.
There's my neck. Step on it. :D
Reasoning is that the pair is bouncing off a Fibonacci retracement level here at about 81.88. There has been a running pattern of a five to seven month rolling decline, followed by a ramping to a higher Fibo level. Long-tail candles and virtual pin-bars indicate that the market action in this area is being contested, meaning that change is likely to happen quite soon.
The previous large moves to the upside in this consistent pattern have lasted for a month, a month and a half or so. Maybe the market is starting to realise that the Fed was only joshing when they were talking about more easing. (That could be one "rationale"...) With that, the dollar should rise against the yen.
The immediate upside target is 84.2 and an outlier target of 85.
My best advice, though: don't listen to a word I say.
Olexsandra
Totally agree. On the bottom I mean.
Picking bottoms is for monkeys.
Elliot wave community agrees the dollar is at the conclusion of its decline. Here is a quick look at the JPY opinion:
http://www.elliottwave.com/freeupdates/archives/2010/10/06/Bank-of-Japan...
P.S. I said, "temporary bottom."
After the jet up to 85, then comes the plummet to sub 80.
Please don't mistake my words.
All fiat's are dead in the end. We only look one wave ahead. :)
Doesn't this front running QE2 just make it that more difficult for the Fed to act? I mean, if the dollar is already this weak BEFORE any intervention, then why intervene at all? They've accomplished their purpose just by talking about it.
TexDenim I basically agree, Q/E2 has not only been priced in but priced in at least a few times in this ante-up, while the FED nervously holds a pair of 2's. Very high stakes game, and I think theyre bluffin'.
All FED minions know giving the public hints cause market convulsions. It's calculated......
(Reuters) - French President Nicolas Sarkozy is gambling on drawing China into a multilateral dialogue on currency stability as the centrepiece of his forthcoming presidency of the G20 economic leadership forum.
It appears we have flash crashes in currencies now:
http://quotes.ino.com/chart/index.html?s=NYBOT_DX&t=l&a=0&w=15&v=s
Note the $ jump down from 77.6 to 77.25, then right back up to 77.6 on the next tick (though granularity is coarse)
...and then to 77.22 -- whaddaya make o' that?
Who is selling USD buying JPY ? It's not for the rate which is now zero to .10 . It's not for economic strength, and it should certainly not be for QE unless I have fallen that far behind in bizarro world logic.
Bruce Krasting was musing the other day that it may be the Chinese.
How to Win Friends and Influence People, maybe they missed that one ...
Look at Soros' piece in the FT, Juncker as per ZH. The ball is in China's court. Now listen to Uncle Al and James Bullard this morning.
The pressure on China to float is mounting. If the Chinese are selling dollar they are either doing the FED's bidding or think that they can precipitate a crisis by accelerating the FED's QE moves, or stop QE2 and avert crisis by doing the FED's bidding ... But on the flip side since every currency is a pair, buying EUR and JPY is certainly not endearing them to either Europe or Japan. Sooner or later, the tariffs will be coming out, not because the US says so but because it will be a fait accompli in order to survive.
Break 79 !!
Can anyone help me understand what is so good about Japan and the Yen versus the dollar? Isn't Japan in just as bad or worse shape than the US? The only potential positive I have ever read abut Japan is their trade surplus and their debt is locally owned.
Thanks!
This is nothing but the Yen doing its "death rattle".
Yen carry trades are unwinding as Japanese investors re-patriate and then liquidate their capital. After thirteen years of ZIRP, they are consuming their seed corn now.
The Yen and the JGB market will go "super nova" sooner than people think - and without notice.
Agree totally with Bam_Man. (You the same Bam_Man from Mish's place?)
The argument for buying Japan is that it's the world's second-largest (soon to be third-largest) economy and it runs a current-account surplus.
It's an empty premise, however, because they country is essentially bankrupt and its population is shrinking. It's my candidate for the first currency to blow sky-high.
Shirakawa should take advantage of the situation and buy gold while it is still cheap in yen. That would really liven things up.
my comment
Chinese are diversifying their currency basket... nothing to add
In order to survive it's better to find food, hard assets that chinese people doesen't like... unfortunatelly they eat almost everything ;-)
Wolf hearts and Dog lungs -- NOT on the menu!
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