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Short USD/JPY (from 20-Aug to 23-Aug)

Stopped out on 23-Aug

Real-Time AmpGFX – sold USD/JPY (Mon 8/20/2018 2:17 PM MT)

Sold half unit USD/JPY at 110.17

Comment

We see the potential for EM Asia to remain more stable or firm as the market awaits the new China-US trade talks and China acts to stabilise its asset markets

On the other hand, we see risks that the market looks at the broader upheaval and uncertainty in global markets as a potential to drag on US asset markets that have to date remained relatively strong.  This is likely to include risks towards lower rates and yields in the USA.

We see the JPY as potentially more positively correlated with Asian currencies and negatively correlated with US yields.

It does not help the USD that Trump is tending to talk down the USD and pressuring the Fed to hike rates less.

Confidence in global asset markets is likely to remain subdued with weaker outlooks in Turkey and Europe.  This may tend to limit the upside for risk appetite and also potentially act to support demand for safe havens.  The USD has been the premier safe-haven lately, but we see this as weakening as the market fears contagion to US asset markets, seeing JPY and Gold returning to favour.

Position

Short half unit USD/JPY at 110.17; s/l  111.23; t/p 108.23



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Greg Gibbs,
Founder, Analyst and PM
Amplifying Global FX Capital Pty Ltd