The Weekly Update: Aiming for the Japanese Yen

The Euro came under heavy pressure against a basket of currencies. The triggering of Article 50 last week did not favor the European currency along with below expectations Consumer Price Index (CPI) data on Friday, which may have reduced the possibility of a rate hike (deposit) in the near future. From our understanding the negotiations between the EU and the UK are due to shift a gear in June, 2017. Aside the Non-Farm Payrolls (NFO), the FOMC minutes will be closely observed by the market. Although the next hike by the Fed is expected to take place in June it may greatly depends on how the market reacts to the brexit negotiations. As we updated via email towards the end of last week, we were anticipating a weak Euro but the market failed to provide us with a clean entry. Forcing a trade in required a fairly large stop, which is why we chose to remain on hold. At the time of this writing we are uncertain EUR weakness is ending. Shorting CHF was also on the table, however, similar to the Euro were unable to locate a clean, technical entry in the market.

The French elections are likely to impact the Euro although the second round of elections (due in May) may have a greater impact than the first round. Despite the polls that favor Macron over Le Pen in the second round, Le Pen has gained some ground. We are continuing to monitor the French elections polls. Our initial assumption was that the French elections may have a negative impact on the Euro, we must also weigh the possibility that the brexit negotiations may turn sour and may also pressure the European currency. Le Pen’s wishes to replace the Euro with the forgotten French Franc, which is why any scent of a possibly victory of the French National Front may trigger unusual volatility in EUR pairs and crosses. Le Pen is widely expected to win the first round and fail in the second round according to the latest polls.

Despite the monthly close we require further data to determine the upcoming trend,for the US Dollar (USD). The currency we are focusing on at the beginning is the New Zealand Dollar (NZD) (possibly JPY).

NZDJPY Weekly Chart

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The Weekly Update: Aiming for the Japanese Yen

NZDJPY Weekly Chart 02/04/17

NZDJPY Technical Strategy

At first glance it may appear similar to our recent trade alert in CADJPY. The 44MA is providing the nearest support with multiple potential targets. However, we are uncertain the gains will materialize this week based on intraday time frames. A bearish gap may increase the possibility NZDJPY is due for corrective gains this week and tighten the required stop. We may decide to layer a buy limit order at a lower price. however, at the time of this writing we are learning towards opting for the trade at market price. We will have to wait for the opening of the Forex market and determine how we wish to proceed with the potential signal. We analyzed JPY pairs and crosses, we are uncertain whether the expected gains may materialize as a result of a weak Japanese yen or a strong kiwi. There is a stronger case for a weak JPY but we must highlight it lacks the result of our analysis is inconclusive.

NZDJPY Trade Alert

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The Weekly Update: Aiming for the Japanese Yen

NZDJPY Weekly Chart II 02/04/17

NZDJPY long at market price (77.96)
Take profit: 81.20
Protective stop: 76.60
Risk Ratio (RR): 1 : 2.3 (approx.)
Estimated duration: 30 days

Note: We are uncertain whether the anticipated gains will materialize this week or the following week, however, we decided to opt for the trade at market price rather than layering an entry order.

NZDJPY triggered the protective stop loss order as safe haven flows poured into the yen amidst geopolitical tension. In extremely rare occasions we re-enter trades that were stopped out.

EURCAD Trade Alert

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The Weekly Update: Aiming for the Japanese Yen

EURCAD 4hr Chart 17/04/17

We have an intraday entry in EURCAD. We have noted the potential entry on Sunday but decided to wait for a breakout. The reversed H&S on the 4hr chart has been affirmed.

EURCAD long at market price (1.4174)
Take profit: 1.4325
Protective stop: 1.4115
Risk Ratio (RR): 1 : 2.5 (approx.)
Estimated duration: 4 days

The potential drawdown is a re-test of 1.4155.

18/04/17 UPDATE: EURCAD is trading at 1.4236 at the time of this writing, we are closing 40% of the long trade at market price and shift the protective stop to 1.4190.

18/04/17 UPDATE II: EURCAD is trading at 1.4294 at the time of this writing.

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The Weekly Update: Aiming for the Japanese Yen

EURCAD 4hr Chart 18/04/17

We decided to close the long trade at market price.

USDJPY Trade Alert

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The Weekly Update: Aiming for the Japanese Yen

USDJPY Daily Chart 18/04/17

Although we were initially not keen on shorting the yen the entry appears to be sufficient with a relatively tight stop. This is daily entry, we will have the ability to begin updating the website during the Asian session, we apologize for the inconvenience.

USDJPY long at market price (108.43)
Take profit: 110.25
Protective stop: 107.70
Risk Ratio (RR): 1 : 2.4 (approx.)
Estimated duration: 7 days

A retracement to 108.08 is the potential drawdown.

19/04/17 UPDATE: USDJPY is trading at 108.79 at the time of this writing, we are closing 20% of the long trade at market price and shift the protective stop to the entry.

GBPNZD Trade Alert

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The Weekly Update: Aiming for the Japanese Yen

GBPNZD Daily Chart 20/04/17

We generally do not issue trades at this hour, however, we have been monitoring all GBP pairs and crosses for some time. We have a daily entry in GBPNZD, we suspect BOE Carney speech later today may be the trigger.

GBPNZD short at market price (1.8285)
Take profit: 1.7820
Protective stop: 1.8405
Risk Ratio (RR): 1 : 4.7 (approx.)
Estimated duration: 7 days

The potential drawdown is a re-test of 1.8360.

20/04/17 UPDATE: USDJPY is trading at 109.27 at the time of this writing, we are closing 30% of the long trade at market price and shift the protective stop to 108.55.

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The Weekly Update: Aiming for the Japanese Yen

USDJPY Daily Chart 20/04/17

If moderate gains are noted on Friday we may decide to exit the trade.

21/04/17 UPDATE II: GBPNZD is trading at 1.8209 at the time of this writing.

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The Weekly Update: Aiming for the Japanese Yen

GBPNZD Daily Chart 21/04/17

we are closing 20% of the short trade at market price.

21/04/17 UPDATE: We do not have a sufficient distance from the market ahead of the first round of the French elections. We may not have the ability to withstand a bearish gap. We have decided to close USDJPY long trade at market price (109.14).