top of page
Search

Known and Unknown - YEN intervention.



Just wanted to have a quick conversation around what's happened in the markets overnight. Wednesday 04-Oct-2023.


The yen has a speculation of intervening and this is a great little topic for everybody. I'm not going to spend too much time on it, maybe five minutes. So watch this video. If you don't really use fundamentals in the market when you're trading, it is important that you, you understand.


What's going on now? There's two types of fundamentals that are going on. Okay, there, the first one is, is the ones that are known. We know some, uh, Um, news events are coming up and we can see between consensus and the actual, if there's a large deviation between the two, then we're going to get a correction in the market.


But sometimes there is, uh, especially with economies like, uh, the Japanese yen is that they like to keep their Um, their currency within a band. If it's too weak, they want to strengthen it. If it's too strong, they want to weaken it. Okay? And this is what's happened last night. Okay? Let's just quickly go over to the DXY.




We have had an, uh, upward trajectory, so US dollar strength has been happening for the last, for a while now. Okay? And what we can see is that because of that strength that's been happening, um, the dollar yen has, um, and this, this strength has, you know, come out of the U. S. government, you know, potential shutdown that's happened, uh, you know, uh, inflation numbers, which are kind of steadying, uh, this is the pace of the economy, which is, you know, you can see it in the last statement here, uh, at a solid pace, okay?


Uh, jobs, uh, you know, remain strong, et cetera. So the economy looks like it's not out of, you know, it's certainly not out of the woods, but it's, it's better than what it was go back six months. Okay. It was, it's a lot better. Okay, now I recommend everybody go over to Bloomberg and have a look at this video in here.


Okay, let me just let me just pause that this video in here is will probably give you some context around what's happening now. Obviously, the yen has weakened so much that the, um, the Japanese central bank want to intervene on it. Okay, so let's go over here. We were sitting up here at the 1. 50 handle, now what, what they don't, they don't want it to be up at 60.


Okay, let me just go and enlarge this, u


m, this is a four hour chart. Let's enlarge it. They don't want it up here. Okay. It's, it's way too weak. Okay. They want to, they want to, uh, get it strengthened a little bit. We, if we go back, let's just go back on a weekly chart. Let's go back to speculation of interventions.


Okay. Down here in 2011, 2012, et cetera, there was, it was very strong. Okay. Because obviously because of the U S dollar Okay. This, he, this candle here is a speculation of intervention. Okay. Now, usually with interventions, what they're trying to do is buy or sell their own currency so that they will either weaken or strengthen it.


Now, most of the time, the Japanese don't necessarily have to, um, actually put money in. They can just, just based on the speculation of them doing it. And you can see here. Yen surges a weakness that was the that was the headline a couple of hours ago, but this is a new headline Japan keeps Yen traders guessing over whether it will intervene Okay, so they haven't actually intervened, but the speculation


of them intervening is enough to move the market, okay?


And it did move it quite hard. Now, if you understand this, and this is what's important for traders, not to just trade based on technicals. It's very important for us to trade and have a, have a reasonable understanding of what happens, uh, What happens on a fundamental basis and you know, we can teach you all of that stuff.


Okay, uh, the known ones and the unknown ones. All right. So we were trading this. Okay, we were, we had, uh, we were on in dollar, uh, cad yen. Okay, based on a very nice SR level support resistance level that was coming in from back over here. Okay. Here's our support resistance level. It did pop up through and then when it came back, um, it's, uh, it started to fall.


But then it started to fall. And the reason for a falling is that, you know, traders already know that 150 is pretty high. Okay, for a dollar. Yeah. And so that means it's quite weak. So it's, You know, you can, you can probably guess that traders are going, well, this is, this is a bit overcooked at the moment.


So we're going to slow down the pace. We understand that the, the Fed, uh, the U. S. government shutdown is kind of, it did come to an end. They did come to a settlement. Um, Well, they kicked the can down the road at least, um, and the strengthening of the U. S. dollar is, you know, is kind of had its run, okay? If you look at some of the, the other, uh, dollar based pairs, you know, they're quite long in the tooth.



I mean, if we go over to here to the sterling, you know, we've been going down for days now, okay? Or for, you know, over, Since the 1st of August, late July, okay? So if you've got a sustained long term trend, then it does have, it may take a breather Okay, and we'll show you where all of those levels in. For example, the level, the next level on, really on Sterling USD will be down here at the 119, 118.


50 level. Okay, it's got, it's sitting at 121 Then the 120, then 19. Okay, but this is this is a very good support level for this to run into and move back. Same with gold. Let's have a look at gold. Let's have a look at gold looking for it's it's it's had a massive run from down from, you know, 1920 down into 1820.


So that's You know, that's 100, 100 move. Okay. 1, 800 is the next level. We can see here that, you know, this, this SR is, you know, looking at the, uh, 1, 800 level. So we may touch 1, 800 and have them bounce back up. Okay. So a lot of traders on the downside are maybe thinking about pulling their positions and taking profits.


And a lot of, a lot of the buying, you know, might start up around here as well. Like the DAX. We trade a lot of the DAX. Um, and that's sitting at a, you know, the 15, 000 level. It's looking at 15, 000, which is a big, huge handle. 1, 800 on gold, 15, 000 on DAX. These are big levels, okay? So this may be coming into the end of the run, okay?


Alright, so. Going back over here, it's important to understand the news. Where, where does, which, what countries are doing what, how they interact with each other. We can certainly trade and our trading on, uh, known events is, you know, a high success rate. Um, but, you know, we've got to be prepared also for shock announcements.


And this is why it's very important to be running stop losses. Okay guys, hopefully you got a bit out of that. If anybody's interested in what we're doing, we have got our Disc


ord channel. I invite everybody along. It's for free. You can see what we're doing. We can see, you can see us, uh, you know, making our trades, discussing our trades.


For example, if we go back days and days ago, okay, You can see here that, um, I've been, I've been looking, still short CADYEN, okay? So you can just simply just copy what I'm doing, um, here we go, back here on the 22nd of September. I was, I was shorting CADYEN, okay? And then it finally comes through by the end of, uh, by now, okay?


We were sitting in it for a while, but we got we got the trade Okay, we put up these swing trades all the time. You can watch us day trading. You can come in and watch us trade live Okay We do have a members area for those guys who are training with us But all of this stuff is here is for free for you to come and have a look at I encourage you to come along The more the merrier the more we'll learn and the more we'll profit.


Okay guys. Thanks a lot for listening. I'll see you later


45 views0 comments

Recent Posts

See All
bottom of page