Abenomics, so called because
it is the brainchild of the Japanese Prime Minister, Mr. Shinzo Abe, requires a lower Yen. The policies call for increased taxes as well as a rise in consumer inflation, all of which should tend to
decrease the value of the Japanese currency. It might have seemed that the only
thing holding back a rise in the USDJPY pair (a rise in this pair means a stronger US dollar and / or a weaker Japanese Yen) would have been the uncertainty
surrounding the outcome of the US Non Farm Payrolls report last Friday.
Sure enough, USDJPY went up in anticipation of
the employment report and then had a very satisfactory spike when it turned out
that it had beat expectations. We were consequently bullish on the pair. We
were not the only ones. No sooner had we taken a position on the long side than
we read the following, on the Dow Jones Newswires:
Our Mandelbrot routine will not stand for such behaviour, so it pulled out of the trade for a small loss, which amounted to 0.68% of equity. Fortunately, our other positions moved well into profit, AUDNZD achieving its first target of 2% of equity, where half the position is locked in as profit, and AUDUSD moving nicely to +1.19% of equity. These pairs are showing every sign of continuing in this vein.
In other news
Gold is still in thrall to developments in
There is a similar case to be made for Cable, the GBPUSD pair. This attempted to go below the monthly 200 period Simple Moving Average (SMA) yesterday, but was pulled back to exactly that level overnight. Again, we wait, on this occasion until there is indication of a move in one or other direction.
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