GBPJPY: Semi-Weekly Observations & the Yen Trade-Weighted Index
Fundamental and Sentiment Analysis:
I wrote a theme regarding the Yen and the expected "revived" Japanese economy moving forward from Q1'2018. I also summarized findings from several sources regarding the pivot to Asia from the West from 2018 to possibly a decade long fall in the DXY as the dollar loses its flickering lights and investors sell the dollar and find value in Asia. the last part, investors finding value in Asia over the USA maybe hard to fathom, even for me, but I have my mind open to it.
Yen Trade-Weighted Index, the US Dollar Trade0Weighted Index and the USD/JPY Exchange rate:
s3.amazonaws.com/tra...shots/a/An4qx44B.png
If we turn to the trade-weighted index of the Yen and compare it with USDJPY and a US Dollar trade-weighted index, we can see that the trade-weighted Yen kept on falling from January 2017 until December 2017, putting in lower lows and lower highs while the USDJPY exchange rate put in higher lows. From 2017 to 2018, USDJPY rose approx. 11%, but the Yen trade-weighted index only rose 3%. Observe the big hump in the middle of the whole year of 2017. It can be observed that the Yen trade-weighted index has not surpassed this hump; however, if we look at the USD/JPY exchange rate's hump in the middle of the whole year of 2017, we can observe that the USDJPY exchange rate has surpassed this hump; hence, this is why I said that there was an 11% increase in the USDJPY rate versus and muted, 3%, increase in the Yen trade-weighted index, and it is visually apparent!
The trade-weighted US dollar index fell the whole year of 2017, losing more than 12% in value. So, we can see that the rise of the USDJPY exchange rate was due to the fall in the US Dollar rather than the a rise in the Yen.
What's more! Japan's financial minister says that there is no need to intervene in the Yen: '“yen isn’t rising or falling abruptly” in a way that would justify the finance ministry stepping in and selling the currency': www.ft.com/content/6...e8-8cb6-b9ccc4c4dbbb
The Gulf Times notes that as the US FED Reserve increases interest rates the cost of currency hedging that Japanese life insurers undertake increases. " Japanese life insurers, which hold around $740bn in foreign assets, may reduce currency hedging as the cost of doing so increases with the Federal Reserve pushing up US interest rates." In fact, "A study of nine of Japan’s life-insurance companies by Bloomberg shows they cut hedging ratios for investments to 59.4% for the six months ended March 31 , down from 63.5% for the previous half." (www.gulf-times.com/s...y-hedging-in-yen-thr )
Also, the inflation level of the Japanese economy is still very low although it has picked up. Rates are still negative. Negative rates were maintained by the central bank of Japan, but this may be ending in 20019.
The evidence is clear, and although not fully presented here, the global markets will shift and pivot to Asia.
Technical Analysis:
We see that this three day chart of GBPJPY has found some resistance between the 38% and 50% Fibonacci level as evidenced in the candle bars pushing down as prices attempt to rise.
We can also see the prices drop down dramatically before this. I am not sure if this is the best pair to trade, but the chart looks like any further Yen strength in the coming weeks will surely push this pair down despite a strong UK economy.
Stochastic are over bought and MACD has fallen below the water line.
Volume Analysis:
The past two bars, equivalent to 6 days, shows us volume divergence. We had a U1 and a U3. Given the context that this exchange rate is in. This tells us that buyers are losing control and will "give up the ghost" the next three days.
(1) ]Fundamental and Sentiment Analysis, (2) Technical Analysis, (3) Japanese Candlestick Analysis and (4) Volume Analysis puts the odds of a sellers market for GBPJPY.
I wrote a theme regarding the Yen and the expected "revived" Japanese economy moving forward from Q1'2018. I also summarized findings from several sources regarding the pivot to Asia from the West from 2018 to possibly a decade long fall in the DXY as the dollar loses its flickering lights and investors sell the dollar and find value in Asia. the last part, investors finding value in Asia over the USA maybe hard to fathom, even for me, but I have my mind open to it.
Yen Trade-Weighted Index, the US Dollar Trade0Weighted Index and the USD/JPY Exchange rate:
s3.amazonaws.com/tra...shots/a/An4qx44B.png
If we turn to the trade-weighted index of the Yen and compare it with USDJPY and a US Dollar trade-weighted index, we can see that the trade-weighted Yen kept on falling from January 2017 until December 2017, putting in lower lows and lower highs while the USDJPY exchange rate put in higher lows. From 2017 to 2018, USDJPY rose approx. 11%, but the Yen trade-weighted index only rose 3%. Observe the big hump in the middle of the whole year of 2017. It can be observed that the Yen trade-weighted index has not surpassed this hump; however, if we look at the USD/JPY exchange rate's hump in the middle of the whole year of 2017, we can observe that the USDJPY exchange rate has surpassed this hump; hence, this is why I said that there was an 11% increase in the USDJPY rate versus and muted, 3%, increase in the Yen trade-weighted index, and it is visually apparent!
The trade-weighted US dollar index fell the whole year of 2017, losing more than 12% in value. So, we can see that the rise of the USDJPY exchange rate was due to the fall in the US Dollar rather than the a rise in the Yen.
What's more! Japan's financial minister says that there is no need to intervene in the Yen: '“yen isn’t rising or falling abruptly” in a way that would justify the finance ministry stepping in and selling the currency': www.ft.com/content/6...e8-8cb6-b9ccc4c4dbbb
The Gulf Times notes that as the US FED Reserve increases interest rates the cost of currency hedging that Japanese life insurers undertake increases. " Japanese life insurers, which hold around $740bn in foreign assets, may reduce currency hedging as the cost of doing so increases with the Federal Reserve pushing up US interest rates." In fact, "A study of nine of Japan’s life-insurance companies by Bloomberg shows they cut hedging ratios for investments to 59.4% for the six months ended March 31 , down from 63.5% for the previous half." (www.gulf-times.com/s...y-hedging-in-yen-thr )
Also, the inflation level of the Japanese economy is still very low although it has picked up. Rates are still negative. Negative rates were maintained by the central bank of Japan, but this may be ending in 20019.
The evidence is clear, and although not fully presented here, the global markets will shift and pivot to Asia.
Technical Analysis:
We see that this three day chart of GBPJPY has found some resistance between the 38% and 50% Fibonacci level as evidenced in the candle bars pushing down as prices attempt to rise.
We can also see the prices drop down dramatically before this. I am not sure if this is the best pair to trade, but the chart looks like any further Yen strength in the coming weeks will surely push this pair down despite a strong UK economy.
Stochastic are over bought and MACD has fallen below the water line.
Volume Analysis:
The past two bars, equivalent to 6 days, shows us volume divergence. We had a U1 and a U3. Given the context that this exchange rate is in. This tells us that buyers are losing control and will "give up the ghost" the next three days.
(1) ]Fundamental and Sentiment Analysis, (2) Technical Analysis, (3) Japanese Candlestick Analysis and (4) Volume Analysis puts the odds of a sellers market for GBPJPY.
評論:
www.youtube.com/watch?v=HEImALAo...
交易進行
評論:
Capturing the swings of the stock market & currency market. It's a dirty job and equity/currency traders must do it.
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