pebblewriter

Tag: currencies

  • Update on USDJPY: Sep 29, 2023

    We’ve been accurately forecasting USDJPY for over 12 years, starting with recognition of a falling wedge that yielded a huge breakout in 2011 [see: USDJPY – How Low Can it Go?] and evolving to an understanding of the importance of the Yen Carry Trade.

    The Japanese economy is a hot mess, but the chart patterns have been fairly easy to discern. When there’s any doubt, remember two principles:

    (1) The BoJ will do whatever it takes to keep stocks on the rise.
    (2) Ignore any other principles.

    So, when a channel breakout occurred in March 2021 [see: USDJPY’s Turn] in the wake of the 35% Covid crash, we were right on top of it. Likewise, we could see the ginormous Inverted Head & Shoulder Pattern coming from a mile away.   USDJPY zipped up through the “resistance” and has tagged every target we’ve set for it. It has further to go, though the path should continue to confound everyone but chartists.continued for members… (more…)

  • Update on Currencies: Jul 6, 2022

    EURUSD and DXY have officially tagged the targets we set for them several months ago.  Recall that in the Mar 7 Update on Currencies, we noted that the Ukraine invasion could accelerate DXY’s next leg up.

    The yellow .707 at 106.276 and white 1.272 at 106.741 both intersect the white channel top in late 2022 – but it seems unlikely that DXY would wait that long to make its move given the fluidity of the Ukraine invasion.

    We noted in April that DXY had broken out of its rising red channel and, based on our analog, was likely to reach the target in July – which is exactly what it did.

    The move was made possible, of course, by EURUSD crashing as we expected. From that same post:

    There are many potential targets between here and the H&S target of .785. The first is the 1.06 lows from 2020, followed by the 1.03 lows from 2016. Once those break down, of course, the euro will face the 1.000 support, also the yellow .618, possibly as early as mid-March.

    The ECB fought the breakdown as long as it could. With inflation and fragmentation both surging, the current plunge has caught many off guard.Then there’s the hapless BoJ, sitting quietly in the corner hoping that no one notices just how fundamentally broken it is. We’ll update all the big picture charts today, focusing on their connection to the plunge in equities over the next two weeks.

    continued for members… (more…)

  • Update on Bitcoin: Jan 4, 2021

    BTC reached our next upside target at 29,890-30,108 [see: Dec 22 Update on BTC.]  Had it remained in either the rising pink or purple channel, it might have taken quite some time. But, as we discussed last month, it broke out of both channels and topped the Fib target at almost exactly the time forecast by our cycle model.

    continued for members… (more…)

  • Crypto Carnage

    As the currency turmoil continues, it’s interesting to note that cryptocurrencies are having a worse go of it than EMs.

    Meanwhile, futures dipped enough overnight to finally backtest the SMA10.  They’ve since rebounded enough to backtest the broken red channel.  It remains to be seen whether SPX will join in and backtest its SMA10 and whether both can manage a backtest of their January highs.

    On the commodity front, RB finally tagged our next downside target — cratering 4.5% from yesterday’s highs.

    continued for members… (more…)

  • JGBs Gone Wild

    Lots of excitement in the currency markets this morning — particularly the yen.  The USDJPY plunged rather decisively to our nearest downside target… …after stories appeared in the financial press that the BoJ was embarking on a buying spree, offering to buy “an unlimited amount of bonds.”  Why would they do such a thing?  Yields on the 10-year had soared to as high as – gulp – 0.09%.

    So far, futures have remained mostly flat — thanks to VIX’s continuing slump and oil and gas’ ramp.  But, can it last?

    continued for members…
     (more…)