USDJPY Hits New Low

Investors remain in wait-and-see mode as EU leaders gather for their second summit in the space of a week in search of a comprehensive solution to the Eurozone debt crisis. With significant divisions between policymakers, expectations are fairly low. Given this negativity in markets, it is surprising that euro has held up relatively well. This suggests that investors who wish to be short the euro are already positioned so, and the holdouts on the sidelines. Things today begin at 1600 GMT, with the entire complement of 27 EU leaders due to attend a short meeting. An official statement is unlikely to arrive until later on.

USDJPY touched new post-1945 lows of 75.71, and the BoJ will be under pressure to announce further measures when its meets tomorrow. Intervention is a significant risk but we believe the Ministry of Finance will wait to see the market's interpretation of today's EU summit before acting. Overnight, EURUSD traded 1.3893-1.3953 and USDJPY 75.72-76.16.

Research Spotlight "Europe's Lost Dollars" UBS G10 FX Strategy

The high cost of dollar funding - a key feature of the recent Eurozone crisis - matters for FX in several ways. It is a crucial barometer of risk appetite, the dollars 'taken away' represent a genuine reduction in supply, making the unit cost of dollars much more expensive, and the shortage entrenches the view that there is no alternative to the greenback. Investors should not assume that the money is going to flow back if/when all is said and done on the sovereign debt front. See "Europe's Lost Dollars" on www.ubs.com.fxweb for further details.
EUR Targets: EURUSD 1m 1.30, 3m 1.20

Three events on Wednesday are likely to vie for investor attention. First, the German parliament is due to vote on whether to authorize the use of EFSF leverage. Our European economists expect the vote to be carried without difficulty, although they acknowledge the "slight risk" that the motion may fail. In the latter (albeit unlikely) case, Chancellor Merkel would have no mandate to approve the use of leverage at the Eurozone summit later that day, and the euro would likely experience a sharp fall.

The first summit is scheduled to begin at 1600 GMT, where the entire complement of 27 EU Leaders are due to attend for a short meeting. A second summit of only the leaders of the 17 Eurozone countries then convenes at 1715 GMT. We expect a formal communiqu? to be released eventually, plus a possible press conference, but no set times have been given. However, given the group clearly has much talking to do, we would not be surprised to see discussions continue until 2200 GMT or beyond.

Newswire headlines suggested that much work remains to be done on the Eurozone's so-called "comprehensive solution". Un-named EU officials said that Wednesday's Eurozone summit communiqu? is unlikely to quantify precisely the EFSF's new leveraged capacity. Instead, a range of possible sizes might be announced. It also appears that a firm figure will not be provided for the size of the EU's bank recapitalization ambitions. We also think we are unlikely to hear a concrete figure for the size of bondholder losses, but it will likely be made clear that the eventual figure will be well in excess of 21%. In short, the summit is likely to be largely a disappointment as far as investors hoping for finality are concerned.

Reuters cited a "senior Eurozone source" as saying that the summit draft conclusions are unlikely to include a phrase on continued ECB non-standard measures. This in line with what German sources said yesterday.

ECB's Draghi said that Italy is being hurt by delay in reforms and exposure to domestic issues. In his ECB capacity, he said that downside risk to growth is 'significant' and is determined to fight the crisis.

Political tensions in Italy continue to build as a package of pension reforms is assembled ahead of Wednesday's EU summits. The EU is insisting on specific measures and commitments and it is not clear if the Italian government is in a position to strike a compromise with the opposition on the matter.

USDJPY Targets: USDJPY 1m 77.00, 3m 75.00

The Bank of Japan's two-day meeting is due to begin on Wednesday, with an announcement expected around 0400GMT on Thursday. The Nikkei newspaper reported that further easing will be discussed, perhaps by expanding its existing JPY 50 trn asset purchase facility by JPY 5 trn. We note that this is one of the gentler easing steps the BoJ could take, and that any ensuing USDJPY upside is likely to be small and short-lived and forgotten about entirely within a few hours.

Japanese Finance Minister Azumi said he had told G20 meeting Japan sees USDJPY level of 76/77 as appropriate, and stressed that he didn't think the G20 communiqu?'s wording on FX prevented Japan from intervening in markets. He also said Japan was ready to buy more EFSF bonds if Europe comes up with a credible solution.

Got all my numbers. Can sleep early today d, cover at 3800 for 173pips w 2 hours work. Hope u all get some from that move. Trading not that hard if you know how to read your chart.

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Added on October 27, 2011, 12:25 amReach my number 55 again, cant resist.



This post has been edited by FxPlayboy: Oct 27 2011, 12:25 AM

Holiday time!!


Attached thumbnail(s)

Is that real account? OMG, 8k USD profit? How did you trade so confidantly and so much? You actually bought 300 oz?

This post has been edited by eXTaTine: Oct 27 2011, 03:00 PM

Good day, so the eu leader patch some shits up and up we go. 38 and 99 will be a level i'm looking for.

"FxPlayboy" thanks for EU directions and levels; appreciated

np. Got my number again.

Here's one more bonus level for you bro=4160. It's thicker cauz it's quite a biggie level. Here's some tips: Think of a S&R level as a zone instead of a specific number, draw it with a crayon than a pencil.



This post has been edited by FxPlayboy: Oct 27 2011, 09:17 PM

Hi to all pro here,I just start my interest in this investment....however I got zero knowledge on this...

Can anyone guide or teach me ? I went to forex website and watched some of the video...but dont really understand

BTW is it a good way to create demo account to start forex and learn it?

Hope to get some reply...Thanks a lot

This post has been edited by Minifans: Oct 27 2011, 09:46 PM

We are at a almost 200 odd pip move

are we poised for higher??

Oh I just love this game

Why not? Always be objective on both sides. Don't keep a long term biased. Have a what-if scenario on both side with the levels to target.
15p away from 4160, pretty much reach already, i give up the last 15p and took my monies.
Tmr friday, likely to be profit taking day.


P/S: if you're underwater holding short, just cut it off and go to sleep early.

did that this morning and slept, going to trade in a bit, might scalp however concerned with the upside potential left :\

heh, u sure have balls of steel to short it when all TF is pointing up.
At this moment i tp @ 4215. not gonna chase and reload long anymore.

if u still long, trail it on the previous support.
if u still short, i hope the current high holds.

g9 lads.

going long boss, make up for todays mornin loss

keep us updated tomorrow

Cool..i am impressed by yr manual trade. U are one more person convince me that manual trade is so rewarding. What indicator do u employ? Ichimoku? Trendline, S& R, fibo, BBands, MA? Mind to enlighten a bit?
Thanks

not bad....
been sitting duck.. reading books...
looking to short eurusd .... soon

@mabsandcals
Be greedy when the market is fearful, be fearful when the market is greedy.
Won't be here everyday bro. Am just here doing a little contribution to fellow malaysian traders for those who asked in the earlier post. Didn't see much concrete contribution so i offer up. Also, you can pm/post your losing trade here. You won't learn most from winning trade but the losers esp the big one.

@wschoo26
Candlestick, basically price along some levels above and below. I done all of those stuff you mention, those indicators can make profits too but the RR ratio alot times lower. What else i havent cover?

@poks
Hint: Your chart is the best trading book. Some trading psychology book helps too if you're quite an emotional trader.

What goes up will not necessary goes down. A currency pair have 6 directions w each currency can go up,down or flat. Always look for reason to continuation first then consolidation then only reversal like Newton's law of motion.

ahhhh

@fxplayboy..HOw to look for reason of continuation..any example?(sorry for this stupid question)

at this moment for me; the best way to detect is by looking at candle pattern..
most indicators will be over bought, crossed etc etc...
but still; i'll say short on eurusd ... don't know.. should be contrarian genes in me
btw; look at 4H chart... showing long setup .... tayor .... it's friday & don't expect much....

This post has been edited by poks: Oct 28 2011, 04:58 PM