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.
Good trade on EURCHF, I have been involved in other crosses went long GBPNZD, took 150 points but the thing just ran up 500+ pips non stop after I had jumped out. You have not covered this pair in a while, would appreciate it to hear you rtake on it long-term.
Regards
Alto
Hi Alto, the GBP-NZD was covered not that long ago, using daily chart
http://fxmadness.com/2010/06/20/general/another-forex-trick-by-china/
It would be nice to see it pullback a little, for a few days. If the uptrend resumes, a buy order could be placed above 2.2110 or so, with target at 2.29- 2.2950. Of course, even if correct, this move doesn’t have to be straight up, like the last one and could take few weeks to complete. Just something to keep in mind
Forget trading, mate, you’ve made enough for the week. Watching the 1/4 finals?
[...] 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), … View full post on EUR/CHF – Google Blog Search [...]
Of course, Alex, of course… It was a joy watch Holland sending Brasil home.
[...] Will Bank of Japan intervene? | fxmadness.com 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), … View full post on EUR/CHF – Google Blog Search [...]
You say you were “looking for the intervention” and it shows.
You were not “bias neutral”. I see the chart showing the level of your buy at 131.97 as being support the previous day.
I would have noted this level as resistance and either faded/shorted or seen first if it would drop back, which it did by 50 pips.
If you were convinced the price was going lon a better entry point would have been 131.50 on the pullback.
Nice lucky break on the spike above SMA. We all deserve that kind of break!!
Pull backs for me are not a primary strategy. Use them sometime, depending on particulars. I like pull backs when price is building reversal patterns, something I didn’t really see. Here I thought that EUR-CHF was selling off too fast, so a correction would likely be snappy, hence for me breakouts are better Intervention? It was coincidence. No way to time it, that I know of, and one can;t count on it. But I don’t buy the SNB argument that they are content with these price levels, so at some point intervention would be likely. At any rate, that was a bonus and faily sharp bounce was expected with or without the SNB. Lucky break? Yes. When you place enough you get a few of those, as well as crappy ones.
[...] rumored intervention in EUR-CHF by Swiss National Bank, there is more evidence that the SNB is not at all happy with the Franc appreciation. Just about a [...]
[...] rumored intervention in EUR-CHF by Swiss National Bank, there is more evidence that the SNB is not at all happy with the Franc appreciation. Just about a [...]