The performance of the "lower currency band" of the USD/JPY interior the JPY currency band is "aligned" to upward direction for 50 PIPs from the previous 77.00 to 77.50. As illustrated above, the lowest level visited by USD/JPY was 78.00 or about 100 PIPs above the previous lower currency band (77.00) and about 50 PIPs above the current "aligned lower currency band" (77.50).
The alignment of the lower currency band to upward direction is very critical for the future performance of JPY currency band and will impact the performance of all JPY-pairs in AUD, NZD, EUR, GBP, USD, CHF and CAD currency bands. Should the USD/JPY lower currency band to be re-aligned up to the level of 78.00 (the previous lowest visited by the pair as illustrated above), then all JPY-pairs will move to upward direction. The performance of JPY currency band, the largest by volume of carry trader's currency have major impact to the performance of all currency bands. However, so long the level of 79.70/80.00 not strongly broken by the pair, all other JPY-pairs will continue to move as forecasted. In the case the level to be broken strongly, then AUD/JPY, NZD/JPY will move to upward direction at slower rate and followed by EUR/JPY, GBP/JPY, CAD/JPY, CHF/JPY sharply to upward direction.
The performance of USD/JPY interior the JPY currency band is critical not only to measure its impact to other JPY-pairs, IN ADDITION TO THAT, should the 78.00 to be strongly defended, then JPY will be consistently to be weakened by USD and to move to upward direction in long-term (economic performance cycle) and will drive all carry traders to be aggressively to enter the market together with macro traders.
In return, the future trading activity/operation will be more and more profitable when compared to the previous years (2008-2011). At such, US economy will continue to grow at faster rate, European economy will hit the rock and slower and gradually to recovery trend, AND Asian economy under going to "economic and financial crisis". This economic performance cycle will be seen in the future if the level of 78.00 to be strongly defended in the market. Keep in mind, BOJ's long term interest rate benchmark "easing" as illustrated above.
The alignment of the USD/JPY lower currency band to upward direction from the previous 77.00 to 77.50 can not be used as an indication of BOJ to narrow the currency band as the previous upper currency band 84.00 remains confirmed. However, should the previous upper currency band (84.00) to be aligned to downward (at least defended at 82.00), then it could be confirmed that inter-central banks communications by and between the BOJ and the FED have agreed to narrow the band. Unless this indicator to be well performed interior the JPY and USD currency bands, it is too early to say that USD/JPY currency band under going to "narrowing band".
The alignment of the lower currency band to upward direction is very critical for the future performance of JPY currency band and will impact the performance of all JPY-pairs in AUD, NZD, EUR, GBP, USD, CHF and CAD currency bands. Should the USD/JPY lower currency band to be re-aligned up to the level of 78.00 (the previous lowest visited by the pair as illustrated above), then all JPY-pairs will move to upward direction. The performance of JPY currency band, the largest by volume of carry trader's currency have major impact to the performance of all currency bands. However, so long the level of 79.70/80.00 not strongly broken by the pair, all other JPY-pairs will continue to move as forecasted. In the case the level to be broken strongly, then AUD/JPY, NZD/JPY will move to upward direction at slower rate and followed by EUR/JPY, GBP/JPY, CAD/JPY, CHF/JPY sharply to upward direction.
The performance of USD/JPY interior the JPY currency band is critical not only to measure its impact to other JPY-pairs, IN ADDITION TO THAT, should the 78.00 to be strongly defended, then JPY will be consistently to be weakened by USD and to move to upward direction in long-term (economic performance cycle) and will drive all carry traders to be aggressively to enter the market together with macro traders.
In return, the future trading activity/operation will be more and more profitable when compared to the previous years (2008-2011). At such, US economy will continue to grow at faster rate, European economy will hit the rock and slower and gradually to recovery trend, AND Asian economy under going to "economic and financial crisis". This economic performance cycle will be seen in the future if the level of 78.00 to be strongly defended in the market. Keep in mind, BOJ's long term interest rate benchmark "easing" as illustrated above.
The alignment of the USD/JPY lower currency band to upward direction from the previous 77.00 to 77.50 can not be used as an indication of BOJ to narrow the currency band as the previous upper currency band 84.00 remains confirmed. However, should the previous upper currency band (84.00) to be aligned to downward (at least defended at 82.00), then it could be confirmed that inter-central banks communications by and between the BOJ and the FED have agreed to narrow the band. Unless this indicator to be well performed interior the JPY and USD currency bands, it is too early to say that USD/JPY currency band under going to "narrowing band".
