Yen Arimasu Ka?

Today I’m going to go Japanese on you guys as Yen setups seem to be on the all you can eat menu. But before we venture to the Forex side here’s a quick reminder of where to expect support should the SPX continue lower today or tomorrow:

1380 still stands as we only dropped to ES 1386.25 today. The fat lady hasn’t sung yet and we just pushed above VWAP – it’s yet unclear if this is a floor attempt or if we’ll see more downside. FYI – the Zero signal is rather weak and I don’t see the bears getting any gold stars for effort here.

That EUR/JPY trade I posted on Tuesday paid off handsomely but we are now bouncing off support. I took positions off the table once we pushed outside both hourly Bollingers. It’s a bit too late to get into a long trade here but wait – all is not lost yet, we have a few more Yen pairs in the running:

Okay I lied – this one is not Yen related but the AUD/USD is exactly where I would want it and it looks a lot like those Yen setups. Just pushed below its NLSL and perhaps it’ll go down the toilet and if not then we’ll have the hourly to help us turn the trade. So this is what I’m doing – short here with a stop above those hourly NLBLs and that 25-hour SMA near 1.036. If stopped out then I’ll wait for a push above 1.0371 and get on the long train. Easy peasy lemon squeezy.

Next runner up – AUD/JPY – one of our favorites. Painting a very similar setup and we just bounced off the hourly NLBL. Short here with only a few pips of risk. Loving this one. Again flip that sucker around if your stop gets hit – you know the game by now.

USD/JPY – comparable to the EUR/JPY. Not the greatest setup right now but I’m posting it in case things turn lower and you feel like adding another pair if this one drops through 81.96. Do not chase this one up right now!

But we’re not done yet – now let’s take a look at various long term Yen perspectives:

EUR/JPY – we’ve been pushing against both the 100-week SMA as well as the 25-month SMA – thus far we remain below. As you can imagine overcoming these long term resistance would be favorable to the BOJ – not so much to the ECB.

Alright here we have the long term view on the USD/JPY – equally important to the BOJ. And apparently the Japanese are winning this war (by losing it) as both the 100-week SMA and 25-month SMA have been overcome. If this is a retest then whatever may come next could get ugly for ole’ bucky. Think about how that may affect your purchasing power late this year and into 2013 – a rather scary picture if you ask me.

Last but not least here’s Mr. Carry Trade Central – the AUD/JPY. Looking sickly on the weekly but nothing to hang our hats on. However the important 100-day SMA has been overcome and is being retested right now. Again, the BOJ seems to be getting their way as long as long as we stay above 84.44 for the next few days. That would finalize this candle and increase the odds of a push higher slightly.

Bottom Line: The fact that we are sitting on various Yen related inflection points makes me take notice. I cannot yet predict the outcome but give it a few weeks and we should have a clearer look at what awaits not only the Yen but also the Dollar and the Euro on a long term basis. Heck, maybe I’ll have to switch you guys over to Roman gold coins after all 😉

Cheers,