Channel Tilting, USDJPY Style

Depending on your affinity for conspiracy theories, the BoJ has either failed to keep a lid on the value of the yen, or has allowed it to appreciate to the point where it now compensates for the 60% increase in the cost of oil since Feb 11.  Regular readers know where I stand.

Regardless, USDJPY’s flat red channel from Nov 2014 broke down long ago.  The falling white channel from December 2014 has broken down. And, the rising purple channel from 2011 is now officially dead.

2016-04-07 USDJPY daily 0606It hasn’t mattered all that much to the “market” yet, as CL has taken over as the most important driver of day to day equity ramps.2016-04-07 CL v ES 60 0606But, at some point, the other 3-4 trillion in equity investments that rode the yen carry trade up from 2011, money that might not be tied in to the CL carry trade — or, might have some well-placed reservations about its long-term viability — are going to wonder if USDJPY is well and truly dead.

Not to worry.  I believe the BoJ has a plan.  And, since all their other plans are working out so well, what could go wrong?

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