{"id":12476,"date":"2012-06-25T02:51:45","date_gmt":"2012-06-25T06:51:45","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=12476"},"modified":"2012-06-25T02:51:45","modified_gmt":"2012-06-25T06:51:45","slug":"japanese-yen-and-volatility-sit-at-cusp","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/25\/japanese-yen-and-volatility-sit-at-cusp\/","title":{"rendered":"Japanese Yen and Volatility Sit At the Cusp Of Renewed Risk Aversion"},"content":{"rendered":"<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on June 22, 2012. <a href=\"http:\/\/seekingalpha.com\/article\/676771-the-japanese-yen-and-volatility-sit-at-the-cusp-of-renewed-risk-aversion\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>Thursday was a good day for the dollar index (UUP) as it experienced one of its strongest one-day rallies of the year. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_12477\" aria-describedby=\"caption-attachment-12477\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_UUP.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_UUP.png\" alt=\"The dollar index bounces back\" title=\"The dollar index bounces back\" width=\"500\" height=\"350\" class=\"size-full wp-image-12477\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_UUP.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_UUP-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12477\" class=\"wp-caption-text\">The dollar index bounces back<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>While the dollar&#8217;s rally was indeed impressive, I think the Japanese yen is an even more interesting story. The yen sits at the cusp of renewed risk aversion. The traditional safe haven of paper currencies sits at one of those critical junctures that likely separates sustained weakness from an important reversal&#8230;{snip}&#8230;a U.S. dollar rally from current levels must certainly confirm risk aversion.<\/p>\n<p>The following charts show that the U.S. dollar is breaking out against the yen (FXY) with a run over the 50DMA, but other major currencies are fading neatly from resistance against the yen.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_12478\" aria-describedby=\"caption-attachment-12478\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_USDJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_USDJPY.png\" alt=\"The U.S. dollar breaks out against the Japanese yen (USD\/JPY)\" title=\"The U.S. dollar breaks out against the Japanese yen (USD\/JPY)\" width=\"500\" height=\"350\" class=\"size-full wp-image-12478\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_USDJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_USDJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12478\" class=\"wp-caption-text\">The U.S. dollar breaks out against the Japanese yen (USD\/JPY)<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_12479\" aria-describedby=\"caption-attachment-12479\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_GBPJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_GBPJPY.png\" alt=\"The pound gains again on the yen (GBP\/JPY) but fades away from 50DMA resistance\" title=\"The pound gains again on the yen (GBP\/JPY) but fades away from 50DMA resistance\" width=\"500\" height=\"350\" class=\"size-full wp-image-12479\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_GBPJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_GBPJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12479\" class=\"wp-caption-text\">The pound gains again on the yen (GBP\/JPY) but fades away from 50DMA resistance<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_12480\" aria-describedby=\"caption-attachment-12480\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_EURJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_EURJPY.png\" alt=\"The euro fades away from the 50DMA against the Japanese yen (EUR\/JPY) for the second day in a row\" title=\"The euro fades away from the 50DMA against the Japanese yen (EUR\/JPY) for the second day in a row\" width=\"500\" height=\"350\" class=\"size-full wp-image-12480\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_EURJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_EURJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12480\" class=\"wp-caption-text\">The euro fades away from the 50DMA against the Japanese yen (EUR\/JPY) for the second day in a row<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_12481\" aria-describedby=\"caption-attachment-12481\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_AUDJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_AUDJPY.png\" alt=\"The Australian dollar fades from the 200DMA versus the Japanese yen for the second day in a row (AUD\/JPY)\" title=\"The Australian dollar fades from the 200DMA versus the Japanese yen for the second day in a row (AUD\/JPY)\" width=\"500\" height=\"350\" class=\"size-full wp-image-12481\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_AUDJPY.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_AUDJPY-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12481\" class=\"wp-caption-text\">The Australian dollar fades from the 200DMA versus the Japanese yen for the second day in a row (AUD\/JPY)<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>For now, I am maintaining my bullish stance on the Japanese yen, and I increased that position today. A failure of this position will have me switch to an emphasis on a bullish dollar position. {snip}<\/p>\n<p>The iShares Barclays 20+ Year Treasury Bond (TLT) continued its bounce&#8230;{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_12484\" aria-describedby=\"caption-attachment-12484\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_TLT.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_TLT.png\" alt=\"TLT continues to churn in a tight range but looks ready to resume its rally\" title=\"TLT continues to churn in a tight range but looks ready to resume its rally\" width=\"500\" height=\"350\" class=\"size-full wp-image-12484\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_TLT.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_TLT-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12484\" class=\"wp-caption-text\">TLT continues to churn in a tight range but looks ready to resume its rally<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Finally, the volatility index, the VIX, surged an amazing 16%&#8230;{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_12487\" aria-describedby=\"caption-attachment-12487\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VIX-full.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VIX-full.png\" alt=\"VIX rallies back toward the critical 21 level\" title=\"VIX rallies back toward the critical 21 level\" width=\"500\" height=\"350\" class=\"size-full wp-image-12487\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VIX-full.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VIX-full-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12487\" class=\"wp-caption-text\">VIX rallies back toward the critical 21 level<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_12488\" aria-describedby=\"caption-attachment-12488\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VXX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VXX.png\" alt=\"VXX attempts a third bounce from the bottom\" title=\"VXX attempts a third bounce from the bottom\" width=\"500\" height=\"350\" class=\"size-full wp-image-12488\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VXX.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/06\/120621_VXX-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-12488\" class=\"wp-caption-text\">VXX attempts a third bounce from the bottom<\/figcaption><\/figure><br \/>\n<strong>Source for charts: <a href=\"http:\/\/www.freestockcharts.com\/\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Be careful out there!<\/p>\n<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on June 22, 2012. <a href=\"http:\/\/seekingalpha.com\/article\/676771-the-japanese-yen-and-volatility-sit-at-the-cusp-of-renewed-risk-aversion\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>Full disclosure: net long Japanese yen, net short U.S. dollar, net long VXX<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This is an excerpt from an article I originally published on Seeking Alpha on June 22, 2012. Click here to read the entire piece.) Thursday was a good day for the dollar index (UUP) as it experienced one of its strongest one-day rallies of the year. {snip} While the dollar&#8217;s rally was indeed impressive, I &#8230; <a title=\"Japanese Yen and Volatility Sit At the Cusp Of Renewed Risk Aversion\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/25\/japanese-yen-and-volatility-sit-at-cusp\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[20,204,62,21],"tags":[772,799,626,177,283,138,983,280,1591,454,500,303,178,120],"class_list":["post-12476","post","type-post","status-publish","format-standard","hentry","category-forex","category-japan","category-technical-analysis","category-u-s-dollar","tag-audjpy","tag-eurjpy","tag-gbpjpy","tag-ipath-sp-500-vix-short-term-futures","tag-ishares-barclays-20-year-treasury-bond","tag-japanese-yen","tag-powershares-db-us-dollar-index-bullish","tag-tlt","tag-u-s-dollar","tag-usdjpy","tag-uup","tag-vix","tag-volatility","tag-vxx"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Japanese Yen and Volatility Sit At the Cusp Of Renewed Risk Aversion - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/25\/japanese-yen-and-volatility-sit-at-cusp\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Japanese Yen and Volatility Sit At the Cusp Of Renewed Risk Aversion - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on June 22, 2012. 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Click here to read the entire piece.) Thursday was a good day for the dollar index (UUP) as it experienced one of its strongest one-day rallies of the year. {snip} While the dollar&#8217;s rally was indeed impressive, I ... 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