SHORT USD/JPY. YEN PAIRS MAY CRASH STRONGLY. HERE'S WHY
1) SP500 on ALL TIME HIGHS, MEGAPHONE pattern, GLOBAL RISK OFF
2) Investors confidence extremely BULLISH
3) YEN INDEX is technically EXTREMELY OVERBOUGHT, ABOVE 2 STANDARD DEVIATION BOLLINGER BANDS on daily basis
4) USD is EXTREMELY OVERBOUGHT aswell as US growth has been EXAGGERATED. Wage growth is WEAK, and INFLATION EXPECTATIONS are really WEAK, [OIL down, below 80 + BoJ QE (deflation export to whole world, and currency wars) + ECB dovish] so FED won't raise rates until 2016 or later against market expectations of June-September 2015. When market adjusts to this new reallity, USD will crash heavily.
5) Non-commercial longs for DOLLAR INDEX at IMM/Chicago Futures Markets are at multiyear highs. Market is EXTREMELY LONG USD, which implies huge asymmetrical risks for USD. Any BETTER than exp data will barely push USD up, but any WEAKER than exp data will damage severely bullish USD trend.
6) China data is WORSENING and WORSENING everday, trade balance weakens, inflation weakens, it won't take much time till market aknowledges that global growth is really SCREWED (+OIL on multiyear lows, indication of low growth) and sooner than later this will spread PANIC amongst market participants causing global RISK OFF.
This is why in my honest opinion, there is a lot of RISK/REWARD on shorting specially USD/JPY and ris appetite driven pair AUD/JPY.
Tip: Don't wait to market crash to get into this trade. Do it now, when close to all time highs on SP500/Nasdaq, and synthethic YEN INDEX, where decision for exiting shorts is easy.
2) Investors confidence extremely BULLISH
3) YEN INDEX is technically EXTREMELY OVERBOUGHT, ABOVE 2 STANDARD DEVIATION BOLLINGER BANDS on daily basis
4) USD is EXTREMELY OVERBOUGHT aswell as US growth has been EXAGGERATED. Wage growth is WEAK, and INFLATION EXPECTATIONS are really WEAK, [OIL down, below 80 + BoJ QE (deflation export to whole world, and currency wars) + ECB dovish] so FED won't raise rates until 2016 or later against market expectations of June-September 2015. When market adjusts to this new reallity, USD will crash heavily.
5) Non-commercial longs for DOLLAR INDEX at IMM/Chicago Futures Markets are at multiyear highs. Market is EXTREMELY LONG USD, which implies huge asymmetrical risks for USD. Any BETTER than exp data will barely push USD up, but any WEAKER than exp data will damage severely bullish USD trend.
6) China data is WORSENING and WORSENING everday, trade balance weakens, inflation weakens, it won't take much time till market aknowledges that global growth is really SCREWED (+OIL on multiyear lows, indication of low growth) and sooner than later this will spread PANIC amongst market participants causing global RISK OFF.
This is why in my honest opinion, there is a lot of RISK/REWARD on shorting specially USD/JPY and ris appetite driven pair AUD/JPY.
Tip: Don't wait to market crash to get into this trade. Do it now, when close to all time highs on SP500/Nasdaq, and synthethic YEN INDEX, where decision for exiting shorts is easy.
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