10.22.2021
SOME KEY OBSERVATIONS:
1- It has come a long way, but that does not mean it has to stop
2-Markets mean revert so is is susceptible to a position wash-out
3-The TREND still points to MUCH HIGHER LEVELS
Lets see some CHARTS – Focus on NZDJPY:
Daily: The pair is finding MILD resistance here, seems like a pause, but it is possible we see a position wash-out. Those should be used to position LONG for the final PUSH HIGHER. But where to BUY ?
2-Hour: It has been a steep climb, markets rarely have MOVES of this magnitude with out pausing, and sometimes reverting and giving back some gains. Caution is merited, but the trend is still pointing HIGHER.
Conclusion:
CROSS JPY moves are strongly correlated to RISK and RATES. We are in an environment where BONDS remain under SELLING PRESSURE, pushing GLOBAL RATES higher, that is a negative for JPY. That has been reflected on the CROSSES. From looking at the US/Global equities charts, we see that we may be in for a FINAL BLOW OFF TOP move, that should translate to more JPY weakness, but markets are fickle, POSITIONING matters and it seems that the trade is a BIT CROWDED. We will wait for a WASH-OUT to position ourselves SHORT JPY. For now we are NEUTRAL CROSS JPY and will remain VIGILANT for ENTRIES into the trade.