USDJPY FOREX - NOW WHAT?

Technically the MKT is in a DIGESTIVE BULL TREND and is flirting with a shift into a more aggressive positive position. Look for excuses to get long but respect the digestive nature and avoid pressing any position.


The 8418 Inflection Pivot is the base for any pullback if yesterday's intervention is going to have any lasting effect. A breach of 8592 and the powers that be will no doubt toast a little sake. A dip under 8418 and a digestive trade is the expectation.

On the SELL side avoid FADE strategies and use a REVERSAL instead. The MKT is excited but has yet to confirm any new advance. Expectations are that any false positive breakout signal will be met with a sharp negative reaction. BREAKOUT strategies are a lower probability but are valid and in line with a reversal scenario. If the MKT has already produced a false positive signal and is holding negative reversal structure, this strategy has potential. Expectations are that any negative BREAKOUT should just go and with the MKT staying under pressure into the close and expanding the digestive range. Anticipate a positive turn and consider reversing off lower support structure.

On the BUY side accept FADE, BREAKOUT and REVERSAL strategies. BREAKOUT strategies have the potential to run. If so, they will just "go" and not look back. Any stop and go action and any profits should be realized as it is more likely the MKT will be setting up a re-test of support to FADE before it can extend higher. FADE and REVERSAL strategies should work off initial major support and only provide one opportunity. Repeated tests or base building and it is more likely the MKT is going to search for its lower digestive extreme rather than resume a positive course.

Note: The MKT has produced a positive signal but is not confirmed. Be ready for it but if it does not materialize, beware of a negative reaction. Don't get caught fading a break that continues to hold structure as the MKT may be defining its lower digestive extreme and will most likely find it after it hits your last sell stop.

JS


* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME_EntryStrategies5min.wmv  .

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USDJPY Forex - CORRECTIVE

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a positive signal against a negative trend. Opportunity exists on both sides of the MKT however the threat of the return of the negative momentum must be respected as a good probability.

Key off the 8573 Inflection Pivot for an indication of the session tone. Above here the corrective signal is in play with a breach of 8624 needed to confirm a higher trade. Trading below 8573 puts the MKT into a digestive posture and a failure from 8522 signals a return to the offer.


Note: The MKT is in a corrective position with the potential to produce a sharp short covering rally, a messy sideways digest or a resumption of the negative trend. Keep your opinions to themselves and focus on what the MKT is telling you it wants to do. Don't fight it, roll with it. If you have > 3 losses consider reversing strategy.

JS


* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME_EntryStrategies5min.wmv  .

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USDJPY Forex - SMOKE AND MIRRORS

Technically the MKT is in a BEAR TREND CORRECTION but remains vulnerable to downside with all trading below 8948. Positive corrective action can disappear quickly so avoid leveraging up on any rally as the negative momentum will try to re-establish itself.


Key off the 8838 Inflection Pivot. This is the base keeping the positive corrective trade alive. A failure here is needed to put the currency back on the ropes.

On the SELL side accept FADE, REVERSAL and BREAKOUT strategies. BREAKOUT strategies below 8838 should just "go" with expectations that the negative momentum is going to resume course. These opportunities should be executed as a "one-shot" deal to avoid getting "chopped" up in a digestive trade. A more conservative entry would be to wait for a positive reaction after a negative breakout signal to FADE against 8893. FADE strategies at 8948 and 8999 should wait for confirmation as the MKT is correcting and has the potential to be "stop and go" as it probes higher. Keep profit targets tight. A better strategy is a REVERSAL, as a violation of a major inflection point that cannot be held is a negative turning point signal with the potential to be the resumption of the negative trend. Profit targets on these strategies should be greater.

On the BUY side BREAKOUT strategies above 8948 although aggressive can be profitable as long as the corrective rise maintains structure. Once broken any trading from the long side is questionable and it may be time to roll the other direction. Use basic trend following indicators to aid in position management of these trades. REVERSAL strategies off 8838 or near the previous session or move low will work best with the expectations that the MKT is going to shift into a more neutral digestive state. Keep profit targets and position management tight on these strategies.

Note: The MKT is correcting an aggressive negative trend and more likely to resume that trend than not. This being said the worst case scenario for sellers expecting the trend to resume is a low volatility "one-way" trade higher. Don't be stubborn FADING higher corrective move highs. After 2 or more losing sales take a break and wait for potential opportunity in the later part of the session. JS


* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME_EntryStrategies5min.wmv  .

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USDJPY - CORRECTIVE SIGNAL = OPPORTUNITY

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a big negative signal against a positive trend. Opportunity exists on both sides of the MKT however the underlying positive tone will maintain the controls above the 9350 Inflection Pivot.

On the SELL side avoid FADE strategies against 9493 until after the previous session low point or major support level has been broken to confirm a negative shift in momentum. REVERSAL strategies should be avoided as any positive signal is more likely an indication that the underlying trend is going to resume. SELL BREAKOUT strategies below 9350 can be profitable but they are aggressive and should look to take profits and potentially REVERSE long at support targets. The trade is counter trend so avoid any negative commitments.

On the BUY side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the positive momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies at the 9350 level, which should have at least 1 if not 2 challenges to the support integrity before executing a long off it. BREAKOUT strategies above 9493 can risk a little more if current events and other MKTs of confluence confirm a positive posture. If not a better approach would be to FADE a negative "squeeze" reaction down to 9422 after a positive breakout signal above 9493 as the neutral technical position can keep the trend sideways.

Note: The MKT has produced a big technical signal against the current trend. Be aware that the negative action may be a 1-day event with the positive trend quickly re-establishing itself. If the MKT is really going to turn it should remain hard pressed and provide little or no relief.

JS

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USDJPY - BACK ON THE FENCE

The USDJPY is trying to make a difference set to press good directional resistance at the 9385-9354 resistance band. If the currency is going to find religion it will in this zone. Jump on any negative REVERSAL signals in this or against this price band expecting a sharp rejection back down to 9238 with the potential of sending the MKT as low as 9091 on the move.

A held trade above 9372 must be confirmed above 9385 to confirm a positive shift. Roll with this signal buying any setbacks down to 9296 with the expectation that this is the beginning of the next leg higher targeting 9548 and 9780 on the move.

JS

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USDJPY - TRUTH OR DARE

Technically the USDJPY is in a BULL TREND ACCELERATION posture after producing a big positive signal. The MKT is in "play" and aggressive action is expected off of technical signals. Anticipate opportunity and position management adjustments, as quick price action is likely.

The 9207 Inflection Pivot is the low point for any pull back if the positive signal is going to remain in force.

On the SELL side REVERSAL strategies can be executed off of major resistance levels at 9379 and 9548. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. A gradual decline folowing a reversal signal and it more likely just a pause before another round of buying, so in either scenerio keep position management tight. Avoid SELL FADE strategies even with confirmation, as this is more likely a lid for a BREAKOUT BUY strategy. SELL BREAKOUT strategies below 9243 and 9207 are not recommended but can be used as a signal for a FADE against Directional resistance at 9311.

On the BUY side accept FADE, REVERSAL and BREAKOUT strategies above the previous sessions low point. BREAKOUT strategies above 9379 should just "go", so do not risk much. Be wary of these strategies early in the session and look to exit on the 1st break in strucutre. BUY FADE strategies off the 9243 and 9207 support levels are recommended over REVERSAL strategies as the MKT is expected to hold higher structure and any failure should be considered a potential negative corrective shift. The MKT is aggressively bid which should keep pace throughout the session if the TREND ACCELERATION forecast is going to play out.

Note: The worst-case scenario for a MKT in this technical position is to go higher early in the session and then break all day. Be alert to recognize this. If you have > 3 loser long trades consider taking the next sell signal anticipating a corrective turn. Remember in this technical position if the MKT is going higher it should just go. If not there is the potential for a corrective break or digestive trading environment.

JS

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FOREX: USDJPY - Corrective Signal

** NEUTRAL CORRECTIVE **
.

Technically the MKT is in a NEUTRAL CORRECTIVE posture, working a slight positive signal bias against a negative trend. Opportunity exists on both sides of the MKT, however the threat of the return of the negative momentum must be respected as a good probability.

9083 is the session Inflection Pivot and high point for any positive follow through if the negative momentum is going to resume.

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On the SELL side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the negative momentum is going to resume. Until the MKT breaks the positive corrective structure, keep profit targets and position management tight as the neutral trading environment has the potential to keep the trade trendless. BREAKOUT strategies can risk a little more if current events and other MKTs of confluence confirm a negative posture with the expectation that the negative trend is going to resume. Get into these trades sooner [higher] than later [lower], anticipating a return to the negative trend.
.

On the BUY side FADE strategies are valid off the 1st major support level but should not risk much and incorporate aggressive position management to reduce profit giveback. The underlying momentum remains negative and any long opportunity is short term with no follow through potential. REVERSAL strategies should be avoided, as any break in momentum is a sign that the BEAR TREND is ready to resume. BUY BREAKOUT strategies are aggressive and the better opportunity is to FADE a negative reaction after a positive breakout signal. These strategies should have resting limit orders at resistance target inflection points. Consider a REVERSE roll if there is confluence with other like MKTS or other indicator studies. The trade is corrective and expectations are for a resumption of the negative momentum.

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Note: The MKT is in a NEUTRAL CORRECTIVE position with the most likely outcome being a difficult sideways trade. The negative momentum has been broken, so beware of getting sucked into "false" failure especially early in the session. There is the potential for a sharp short covering rally so don't FADE a rise that continues to hold structure.

JS

This post supports the Strategy Based Trading, which is a methodology that focuses on the applied strategy verses a specific market. The approach looks to align strategies with markets whose current technical behavior matches the strategies criteria. Please review the following CME sponsored tutorial for a complete overview of this approach.

STRATEGY BASED TRADING Review http://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html

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FOREX: USDJPY - PATIENCE

The USDJPY made some headlines but has yet to confirm a positive shift in sentiment and remains in a NEUTRAL DIGESTIVE technical state. Key off the 8987 Inflection Pivot for an indication of the session bias. This is the low point for any healthy pull-back. Above here the currency maintains a positive TRANSITIONAL tone, so be cautious buying into any early excitement. A breach of the 9117 resistance pivot will signal a test of the 9188-9182 resistance . If the rally is going to stall it will here. If not the recent highs at 9379 will be put to the test.

A failure from 8987 is a sign of weakness however a break below 8956 is needed to confirm a resumption of the negative momentum targeting 8861 on any turn for the worse. 8737 is the extended target for any new move south.

JS

This post supports the Strategy Based Trading, which is a methodology that focuses on the applied strategy verses a specific market. The approach looks to align strategies with markets whose current technical behavior matches the strategies criteria. Please review the following CME sponsored tutorial for a complete overview of this approach.

STRATEGY BASED TRADING Review http://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html

For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary FREE Trial.

FOREX - USDJPY - Positive Signal

FOREX - USDJPY - BULL TREND ACCELERATION

Technically the MKT is in a BULL TREND ACCELERATION posture and has produced a big positive signal. The MKT is in "play" and remains a buying opportunity down to the 9188 Inflection Pivot. Anticipate opportunity and position management adjustments, as quick price action is likely.

On the SELL side REVERSAL strategies can be executed off the 9408 and 9471 resistance levels. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. A gradual decline folowing a reversal signal and it more likely just a pause before another round of buying, so in either scenerio keep position management tight. Avoid SELL FADE strategies even with confirmation, as this is more likely a lid for a BREAKOUT BUY strategy. SELL BREAKOUT strategies below 9188 are not recommended but can be used as a signal for a FADE against the 9345 Directional reisstance.

On the BUY side accept FADE, REVERSAL and BREAKOUT strategies off the major support levels. BREAKOUT strategies above 9408 should just "go", so do not risk much. Be wary of these strategies early in the session and look to exit on the 1st break in strucutre. BUY FADE strategies are recommended off the 9219 and 9188 support levels over REVERSAL strategies as the MKT is expected to hold higher structure and any failure should be considered a potential negative corrective shift. The MKT is aggressively bid which should keep pace throughout the session if the TREND ACCELERATION forecast is going to play out.

Note: The worst-case scenario for a MKT in this technical position is to go higher early in the session and then break all day. Be alert to recognize this. If you have > 3 loser long trades consider taking the next sell signal anticipating a corrective turn. Remember in this technical position if the MKT is going higher it should just go. If not there is the potential for a corrective break or digestive trading environment.

JS

This post supports the Strategy Based Trading, which is a methodology that focuses on the applied strategy verses a specific market. The approach looks to align strategies with markets whose current technical behavior matches the strategies criteria. Please review the following CME sponsored tutorial for a complete overview of this approach.

STRATEGY BASED TRADING Review http://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html
For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary FREE Trial.

USDJPY - PRESSING THE POSITIVE TURNING POINT

FOREX - USDJPY ** NEUTRAL POSITIVE EXTREME **


The MKT is pressing the upper edge of its neutral digestion at the 9164 resistance pivot and will need to generate a positive push today if it is to avoid falling back into a corrective trade.


On the Sell side REVERSAL strategies off the 9164 and 9241 levels will work best as any false positive signal is expected to provide a sharp negative reaction. FADE strategies off the 9164 level are valid but will work better after the 2nd or 3rd press into an area. BREAKOUT below the 9010 support Inflection Pivot are a lower probability and should be used as a signal for a FADE strategy against the 9087 Directional resistance.


On the Buy side FADE and REVERSAL strategies are recommended off the 9087 and 9010 pivotal levels, especially if the previous session low point remains intact. BREAKOUT strategies above 9164 should hold structure after a resistance breach if they are going to follow through targeting 9318 and 9434. Any break in momentum and the market will be vulnerable to drop back into a digestive trade.


Note: The MKT may need a session or two to catch its breath. Keep an open mind and let the MKT tell you was is.



JS

This post supports the Strategy Based Trading, which is a methodology that focuses on the applied strategy verses a specific market. The approach looks to align strategies with markets whose current technical behavior matches the strategies criteria. Please review the following CME sponsored tutorial for a complete overview of this approach.

STRATEGY BASED TRADING Reviewhttp://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html

For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary FREE Trial.

USDJPY - TRYING TO MAKE A DIFFERENCE

The USDJPY is trying to save face and will need to sustain a trade above the 9269 Inflection Pivot to maintain its composure. A held failure here is a sign of weakness that puts the MKT on the defensive down to 9195 and 9174 on any negative turn. Stay nimble. A positive reaction is expected. Don't fight any sustained weakness at these levels however as the an acceleration to the downside is expected targeting 9047 and 8971.

A held trade above 9310 will give the buyers something to work with up to the 9343 resistance pivot. If the rally is going to fizzle it will here. A held breach is expected to spark a little excitement targeting 9416 on the initial move. Work any positive structure. 9650 and 9751 are the extended targets for any short term sentiment shift.

JS

This post supports JS Services Strategy Based Trading approach. For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary Trial.

USDJPY - Flip Flop

The USDJPY switched gears bouncing off support and producing a positive corrective signal. This MKT is fighting higher and corrective states can be erratic. For now key off the 9460 Inflection Pivot for an indication of the session tone. Above here the positive signal is in play targeting 9568-9562 on any upside follow through. Be patient. If the rally is going to fizzle it will here. A held breach and the positive momentum can carry as high as 9719-9700 before it exhausts.



- A break under 9460 signals this MKTs intentions of going nowhere. Time to look elsewhere for opportunity as they only thing going on will be lower premiums.


JS


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Posted by John Slazas at 10:16 PM 0 comments
Labels: FOREX: USDJPY

USDJPY - Negtive Signal Needs Confirmation

FOREX - USDJPY


The USDJPY cross produced a negative signal and is flirting with a negative shift. 9482 is the Inflection Pivot keeping the signal in play down to the 9405 support. If the MKT is going to stabilize it will here. A held failure confirms the negative signal targeting 9251 on any downside follow through. Expect a reaction. 9116 is the lower extreme.



If the negative signal is valid the MKT will close lower and at some point in the session take out yesterday's low at 9403. A rise above 9482 puts the signal in question with 9562 the high point for any reversal of fortune. Although a reaction is expected trading at these levels is expected to be erratic with 9719 the high point for any false hope . No follow through is expected.

JS

This post supports JS Services Strategy Based Trading approach. For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary Trial.

USDJPY - Negative Signal needs confirmation

The USDJPY is flirting with a negative shift in sentiment and will maintain this posture below the 9621 Inflection Pivot. This is the high point for any buying today if the negative signal is going to follow through and the best entry for any short position. Look for FADE opportunities as any test of resistance is expected to be met with a sharp rebuke. A held violation of 9627-9621 negates the negative signal putting the MKT back into a difficult digestive trade up to 9884 on any positive shift in sentiment.





A break under 9471 is needed to confirm Monday's signal targeting 9321 on any negative follow through. The MKT is having trouble sustaining any new move and this is not expected to change. Expect stop and go conditions with 9130 the release low point for any unwinding.

9546 will act as a good pivotal level within the 9621- 9471 digestive range.


JS



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USDJPY - Hedge Strategy Practical Application

Risk Management Strategies Using Inflection Pivots

Inflection Pivot analysis is a guide to the psychological landscape of a market, identifying price points where shifts in sentiment will occur. These points of inflection can be used for directional trading opportunity as well as the basis of a hedge or risk management program.

Referring to the May 26, 2009 post regarding the USDJPY cross rate.

A Japanese Corporate uses YEN [JPY] to buy U.S. Dollars [USD] to purchase US goods or receives USD for goods sold and needs to convert the USD to JPY to pay employees and shareholders. The fluctuations of the conversion rate can have a significant impact on the corporate bottom line if this is not managed properly.

To protect itself from the currency fluctuations the Corporate will hedge its exposure by taking an opposing trade to their underlying position. So if they are net long JPY and will need to pay USD for goods [LONG JPY/ SHORT USD] they will put on an opposite trade [SHORT JPY / LONG USD] to lock in a “guaranteed rate” that they can then use to base their cost analysis on.

This hedge is a form of insurance. Insurance can be expensive.

To reduce costs the Corporate may not always be hedged and will assume an acceptable variance of cross rate risk and only hedge significant “worst case” shifts. How is this acceptable variance derived and what constitutes “worst case”? This is basically an internal risk management overlay of what “works” for the corporate risk appetite.

In addition to any transaction cost there is an additional “opportunity cost”. If the USD depreciates this will be a good thing as the cost of goods to purchase will be less, basis JPY. By hedging out the adverse affects of cross rate volatility we also exclude the positive effects.

So how can we use inflection pivot analysis to improve a hedge strategy.

On May 26, 2009 the Inflection Pivot Blog outlined parameters for a hedge strategy.

Assuming we are net LONG JPY verses the USD. Our position is vulnerable to an increase in the USDJPY. A hedge would be to go long the USDJPY. The question is, are we at risk and if we are where do we buy?

From the analysis we read:

The USDJPY is trying to transition into a positive position and will maintain this posture above the 9355-9340 Inflection Pivot.

Our position is vulnerable as the MKT is above the 9355 Inflection Pivot and we should consider a hedge immediately with the expectation of the USDJPY appreciating.

If the MKT is good it will stabilize above here. A breach of 9670 is encouraging however a violation of the 9971 Resistance Inflection Pivot is needed to signal a positive acceleration in momentum targeting 10697 and 11272-11235 on the move.

Reading further into the work our initial risk is up to 9971 in the USDJPY. Potentially this is the high point of an acceptable variance. Trading above 9971 however and we are risk for a much more significant price move up to 11272. If we are not long already, we should definitely go long USDJPY above this inflection point to hedge our position.

A break under 9277 and the USDJPY revisits the 8715 recent low point where buying should be expected. A test of this support is negative however and positive reactions should be considered opportunities to FADE.

A failure from the 8715 support inflection pivot will extend the weakness down to the 8030-7830 support band. Look for buying opportunities in this zone as no immediate follow through is expected and the outlook a 3-5 month digestive rally out of this zone.

In summary from the Inflection Pivot analysis we should only become comfortable with the cross rate going in our favor below 9277 and at this time remove any hedge, as expectations are that the USDJPY will drop down to 8715 if not the 8030 area. If our expectations are correct we should consider applying a hedge in the 8030 area to lock in a favorable rate, as an appreciation of the USDJPY is the outlook from this support base.

The Inflection Pivot work can be used to manage an outright long position in the USDJPY or for the construction of option-spread positions using the inflection pivot points as strike price levels.

By defining significant psychological points of inflection we put structure to random price action and provide a framework to create hedge strategies that anticipate shifts in market sentiment and price.

For more information please contact me directly at info@jsservices.com.

JS

USDJPY - At the Crossroads

The USDJPY is trying to transition into a positive position and will maintain this posture above the 9355-9340 Inflection Pivot.

If the MKT is good it will stabilize above here. A breach of 9670 is encouraging however a violation of the 9971 Resistance Inflection Pivot is needed to signal a positive acceleration in momentum targeting 10697 and 11272-11235 on the move.

A break under 9277 and the USDJPY revisits the 8715 recent low point where buying should be expected. A test of this support is negative however and positive reactions should be considered opportunities to FADE.

A failure from the 8715 support inflection pivot will extend the weakness down to the 8030-7830 support band. Look for buying opportunities in this zone as no immediate follow through is expected and the outlook a 3-5 month digestive rally out of this zone.

JS