As we know, the BoJ recently intervened in trying to weaken the Yen in order for Japan to be more competitive in the global markets. We also know that the SNB has intervened intermittently over the last year, in trying to weaken the Swissy for the same reason. However, central bank intervention never works. As we can see from the Swissy, it is still going from strength to strength. The reason it does not work is that all the big players know when intervention is going to take place and wait for the currency to depreciate and then take the opposite trade knowing that the central bank then either has to intervene again or give up. A lot of money can be made from this maneouvre. So, going back to the recent BoJ intervention, I am looking to short the EURJPY and I have seen a good supply level in which to do so. See 4hr EJ chart. So I will be looking to get short between 114.00 and 114.50. However, as I do not like catching falling knives, I will wait for a change of direction pattern to form on my intraday timeframe (30 min) and use the 5 range bar chart to get a better entry. There are rumours that the BoJ will defend the 82 level of the USDJPY, so that is where I expect it to return.
On Monday September 27th, 2010 at 01:15AM by krissylinne - Like - 0 People
On Monday September 27th, 2010 at 06:41AM by colstreamer - Like - 0 People
Interesting, I have a theory it'll work like a news event, in other words, the bank intervention will cause a massive spike (as we have already seen) and once price returns to where it was before the spike it'll carry on doing what it was doing before.
Why'd you say 82.00? Price hasn't been there since may '95? Did you mean 83.00? That's where I'm looking for a reversal.
@Celine, what price did you enter at? 84.00 has nearly been hit a few times recently and there seems to be support at 84.10
On Monday September 27th, 2010 at 09:14AM by dudleymuggins - Like - 0 People
Judah, It is a rumour I read last week, that the BoJ will defend the 82 area. What this means is that the big boys will also be looking at that level and will go long there. So the BoJ will then not have to intervene as the work is being done by the big boys. This also means that price will inevetably get near the 82 level.
Celine, I presume that your trade is a short and TP is 84. You could probably have aimed for 83. Nb what was you entry price?
On Monday September 27th, 2010 at 09:40AM by colstreamer - Like - 0 People
On Monday September 27th, 2010 at 10:30AM by dudleymuggins - Like - 0 People
As you know, rumours are planted by the big boys to fool suckers (us). So they will probably start the big upmove higher than 82 (probably nearer 83), to stop retail traders getting in at the start and then we have no other choice than to wait to get in on a retrace, thus adding more fuel to the up move and then the novices ('the herd') get in much later, just when the move finishes, thus locking them in to a bad trade. Whenever you hear a rumour, you need to ask yourself - 'What is their agenda?' And it is usually to separate you from you hard earned cash.
Yes, I am still looking to short around the 114.00 to 114.50 area. However, if UJ gets to 83 at the same time as EJ gets to my supply area, then I may have second thoughts about it as that could be where the next sell off of the Yen takes place. So I wont be catching a falling knife at that time.
On Tuesday September 28th, 2010 at 12:38AM by buruguduy - Like - 0 People
On Tuesday September 28th, 2010 at 05:27AM by krissylinne - Like - 0 People
@Dudley - nope, I bought the pair as soon as I heard of the "intervention". The pair peaked when my trade was ahead by 20 pips, but I held on even when red candles began to pop up in the shorter time frames. Oh well, lesson learned, eh? :D
On Tuesday September 28th, 2010 at 10:10AM by dudleymuggins - Like - 0 People
On Tuesday September 28th, 2010 at 08:34PM by buruguduy - Like - 0 People
On Tuesday September 28th, 2010 at 09:13PM by dudleymuggins - Like - 0 People
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