Waiting on the Bank of Japan

I am alive and watching the market somewhat.  I am watching what unfolds at midnight EST when the Bank of Japan announces whether they are increasing interest rates or not.  If they do, it would mark the first time in six years.  Supposedly, they are expected to raise rates by at least 25 basis points.  According to Kathy Lien, even if BoJ does raise rates, it doesn't necessarily mean bullish times for the Yen.  According to her, there are 3 possible scenarios that can happen tonight:

1. Leave interest rates alone which would clearly be Yen bearish.  LONG USD/JPY
2. Raise rates 25 basis points and signal that in the upcoming months more rate increases are expected.  This is clearly Yen bullish. SHORT USD/JPY
3. Raise rates 25 basis points and indicate that just because they are raising rates now doesn't mean they will continue to raise rates.  This is a highly likely scenario and one which doesn't give a clear directional signal.

I don't know what I will do if anything to trade this pair tonight.  The pair is trading right now at its highest since the end of June at 115.87.

If you want to follow the Bank of Japans decision, go to http://www.boj.or.jp/en/theme/seisaku/kettei/index.htm  

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Video Journal - 30 pip GBP trade this morning

Here is my +30 pip trade this morning.  Don't forget that I also had a -30 pip trade using the exact same logic but with the Yen.

Click [Read More] to see video.

[Read more]

Popularity: 4%

May Issue of Currency Trader Mag Here Now

The May issue of Currency Trader Magazine has been released.  The highlights of this month's issue include the following:

•  Trading the Mexican Peso
•  Interview with Money Manager Peter PanHolzer
•  Forex Money Management Strategies
•  The Euro Index
•  Japan and the Yen: New Era or more of the same?

Content Removed: Download from http://www.currencytradermag.com

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Newest Forex Volume Report Released

Open interest dropped across the board this week except in the Australian dollar.

Canadian Dollar
Big swing from NET LONG to NET SHORT

Swiss Franc
Very Bearish.  50,327 Short positions vs. 3,462 Long positions

British Pound
18,418 Short positions, 13,183 Long positions 

Japanese Yen
Decrease of 17,632 short positions.  Still Bearish 

USD Index 
Decrease of 7,196 long positions.  Still bullish with 11,114 Long positions and 4,491 Short positions 

Euro 
EURO remains Bullish with another decrease this week in Short positions (-10,149) 

New Zealand Dollar
Less Bullish than last week with decrease of 688 long positions and increase of 178 short positions 

Australian Dollar
Bearish.  Increase of 15,455 Short positions on increasing open interest. 

Crude Oil 
Less open interest than last week with an almost equal balance of long (128,840) to short (135,177) positions. 

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March Issue of Currency Trader Magazine

After all of our comments regarding the lack of substance regarding ichimoku chart analysis, the March issue of Currency Trader Magazine fills the gap.  There is a 6 page article, "Demystifying Ichimoku analysis."  I'm looking forward to reading it.  In addition, the new issue contains:

-Dollar Bull: Can the buck stay a step ahead of pundits?
-Japanese Yen: Marching to its own drummer
-Currency Basics: All about the interbank
-Currency System Test of the Trend Strength Indicator

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Waiting for a Yen pullback?

I’m waiting on a Yen pullback.  The price has been hanging around the S2 pivot point all day.  Depending on where the pair is during the Asian open, I may be shorting this pair if it pulls back a little more.   Remember that this pair is trending on the 240-minute and momentum indicators aren’t worth a bit.  Right now I’m watching the Directional Movement Index, pivot points, and trendlines.  The pair will have to pull back quite a bit for my continued interest, at least to the high 116’s.

The chart below shows the S2 pivot point at 116.08, .09 below the price (bottom red dotted line).  The pivot point for today was 116.807 (thin solid black line)

 

 

 

 

 

 

 

 

 

 

 

 

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