USDJPY – Haiku and Ichimoku

USDJPY Kijun Sen Feb 2013

The selloff of EURJPY on 26th Feb was quite a bitterpill to chew for many, especially for those who booked their best quarter for donkey weeks, months or quarters riding it (and USDJPY).

I confess that I am one of them, but given I was still having my last Katsu-don at Narita Airport that day, onshore protection kicked in and I was spared the guillotine.

Many people were lost, probably too occupied licking their wounds but I wasnt. I was not convinced too – I saw it more as a EUR selloff even though all the USDJPY downisde levels were taken out. Just so happened I was chatting to a friend who once worked for a Japanese bank but is now in commodities.. he casually commented “not v sure, just look at the ichimoku la since its usdjpy.. maybe something there?”

I did, I acted – I bought. But the discovery was quite humbling. The price has crossed the Kijun-sen (91.40) on daily but closed above at 91.95 on 26th Feb. When I started to look at it, it was hovering around 91.70s, then it took out that Kijun-sen again only to close above again at 91.73. The same happened on 28th Feb then on 1st March (it opened on the Kijun-sen this day at around 92.15).. And here we are today at 93.70. The last time Kijun-sen was touched was back on 9th November at 79 handle.

Campers were spooked, but obviously they were not disheartened, they setup camp again cautiously and the price action was reminiscent of the last few months – desperate catching up. But the bigger lesson learnt was that if its Japanese poems it will have to be Haiku.. if its USDJPY, highly probably still the Ichimoku. Kijun-sen now is at 92.55 AND STILL RISING, look to enter longs there and adding dips to 91.70 on momentum, reassess if it does close below the Kijun-sen.