As I already wrote in my post here , JPY is the fuel for carry traders, usually gigantic US hedge funds. And any substantial raise of JPY against USD or different currencies they use, go to big loses. That is why last couple days they selling like crazy. And because they are using big leverage, like 10:1, in order they to get out $ 1,000.00 out of the stock market, they need to sell stocks for $ 10,000.00 . And because they can not sell the "toxic" sub-prime bonds and stocks, they selling whatever they can - energy, gold, silver, technology etc.
However, there are lot of other sources where you can read about it. Here I write about currency speculations, so this is enough for the moment. (Even I will copy / paste same in my EUR/USD report later today :-) )
So lets take a look on JPY charts.
(Yen index chart not shown, but I think it not need to)
AUD/JPY 1 day chart:
Tragedy is full :) , a wedge, a fall from the wedge. Currently we have some support, but we will see.EUR/JPY 1 day chart:
Wedge, fall from it, then a parallel channel from a while, then fall from the parallel channel.USD/JPY 1 day chart (GBP/JPY is same):
Something like a wedge, but actually a rising parallel channel (brown). Then, parallel downtrend channel (pink). Finally a drop from downtrend channel.Here, in USD/JPY, we still have hope that this is false break, and JPY can go back in the channel. But anyway, the channel in question is downtrend anyway.
Summary:
Note all this is not a technical analysis, at least I do not look at it as it is, because I am checking just a 1 day chart.
From what I see, I believe this will have not negative, nor positive effect on EUR/USD trading.
the JPY - up = the other currencies - down
the JPY - up = carry trade - down
carry trade down = stock market - down
and if you add panic,
stock market panic = all derivatives, commodities, metals and energy down
Stay aside :-)
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