The recent appreciation of the Japanese Yen is raising some talk about increased probability of intervention by the Bank of Japan. So far these are market rumors, nothing has been stated by the BoJ. However, the new finance minister promised to watch exchange rates carefully. Also, few months ago, the Bank of Japan increased funds in its “intervention account” as if preparing for just such eventuality. In all likelihood, before this happen, markets will be subjected to a fear campaign, with threats of intervention preceding the action itself. Hard to say just how willing the Japanese central bank is to start it, given recent futility of the SNB interventions, but surely the BOJ is studying that carefully.
Speaking of interventions and the Swiss National Bank, it appears that this is exactly what they did today. At least traders are pointing fingers in that direction, trying to explain sudden jolt in the CHF pairs. The EUR-CHF, which seems to be the proxy of general strength of Franc, dipped under 1.3100 today, another all time low. I wrote about possible intervention around 1.3000 in couple of prior posts. This one (if it was an intervention), came later in a day, when the EUR-CHF was already off its lows. The move, whatever caused it, was welcome, because I’ve been looking for it over last few day.
My previous trade, described in Spain’s credit rating post, didn’t work out as planned, but brought a few pips. New buy order was placed at last minor high. However, when the price made a new low, it was moved from about 1.3300 to 1.3297. Then the move came. Objective was 1.3400 which was reached fast, exactly the kind of move I had been looking for. Strangely, though, the take profit order experienced slippage and the trade was closed at 1.3386. Nothing really to complain about. I still want to be on a long side, should the price move above 1.3400 again. Target will be 1.3600.
The Yen crosses clearly ran into a strong support and are reversing now. In fact, daily candlesticks indicate a bounce of some size, 200-400 pips perhaps, depending on which pair. In this example, I will look for more shorts when the AUD-JPY gets to 76-77, seeking reversals on hourly charts. That’s for the the “money trades”. Until then, smaller size transactions using smaller time frames, like 5M or 15M and playing both sides of the market.
Mike K.
http://www.fxmadness.com/
read more “Will Bank of Japan intervene?”
Speaking of interventions and the Swiss National Bank, it appears that this is exactly what they did today. At least traders are pointing fingers in that direction, trying to explain sudden jolt in the CHF pairs. The EUR-CHF, which seems to be the proxy of general strength of Franc, dipped under 1.3100 today, another all time low. I wrote about possible intervention around 1.3000 in couple of prior posts. This one (if it was an intervention), came later in a day, when the EUR-CHF was already off its lows. The move, whatever caused it, was welcome, because I’ve been looking for it over last few day.
My previous trade, described in Spain’s credit rating post, didn’t work out as planned, but brought a few pips. New buy order was placed at last minor high. However, when the price made a new low, it was moved from about 1.3300 to 1.3297. Then the move came. Objective was 1.3400 which was reached fast, exactly the kind of move I had been looking for. Strangely, though, the take profit order experienced slippage and the trade was closed at 1.3386. Nothing really to complain about. I still want to be on a long side, should the price move above 1.3400 again. Target will be 1.3600.
The Yen crosses clearly ran into a strong support and are reversing now. In fact, daily candlesticks indicate a bounce of some size, 200-400 pips perhaps, depending on which pair. In this example, I will look for more shorts when the AUD-JPY gets to 76-77, seeking reversals on hourly charts. That’s for the the “money trades”. Until then, smaller size transactions using smaller time frames, like 5M or 15M and playing both sides of the market.
Mike K.
http://www.fxmadness.com/
