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CNHJPY - Massive SHORT!! The pair that just keeps on giving ...

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... and giving, and then give some more.
Should one lack the inclination to deal with everyday FX volatility (or with the lack thereof) then this is the pair to be SHORT, in George Foreman style, ala; "Just set it and forget it!"
Simply put, China's absolute best hope (just a dream, really) to survive it's oncoming demographic (industrial, deurbanization, and ... ) collapse to somehow muddle through one of it's worst decade and a half well under way, to transition through total "Japanification". (This is only a hope, requiring lots and lots of luck to pull it off.)
This is undeniably China's best possible future scenario, all else being a far inferior outcome.
Consequently, as Japan is snapping out of it's 30 year slumber just as China "hopes" to achieve Japanification, this pair (provided any future convertibility of the Yuan) will mirror that process, obviously like no other.
E.g. SELL it (Short) for good! (through about 2035 and possibly beyond.)

Here is the Weekly;

SHORT it anywhere here!

p.s. The scenario outlined in the main (monthly) chart is only a near-term outlook (12-15 months out), severely understating the potential ultimate (Short) mileage in this pair.

As for a SHORT Entry;

Selling at this point provides a 1:12 R/R, even to the nearest target (18 Yen).

SELL (Short) nearest Stop Hunt. (Set Stops 1:15 R/R to initial target: 18)

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Boom!

A perfect hit. One should be max loaded SHORT at this point.

We're at our original SELL point (not necessarily yours).

SHORT that Stop Hunt and refer to the chart.

Our SHORTs are holding up well here.

That whole "Xi stimulus" business will be a good opportunity to lean into this pair even more - Short - as it is most likely to be an abject disappointment. (If you don;t believe me just look at copper - or crude, etc.)

China;
OK, so the PBC "cut" the 1- and 5-year forward rates by 10 basis points - which is nothing! "The markets are waiting for some concrete fiscal stimulus" seems to be the widespread sentiment.
Good luck with that! (That ought to be the longest wait in history save for some meaningless window dressing.)
Japan;
Firing on all cylinders! Not only has the defense budget doubled (from 1% of GDP to 2%) in recent months but arms and related industries are up +43% YoY, high-tech +23%, heavy industry +17%, and so on. Japan is in a slumber no more!
Consequently, the pressure continues to grow on the BoJ to "do something" about their ultra-dovish curve controls.
Overall, I have a sneaky feeling (a conviction, really) that when that day arrives - as it is getting closer by the minute - it will be more of a surprise than not considering it's extent and depth. (Like EURJPY<140, CNHJPY<16, etc.) Additionally, the BoJ's pain tolerance seems to lie somewhere between 145-150 USDJPY as it was demonstrated recently when they were forced to step to support the Yen.

If you haven't gotten Short, yet ...

... here is a second chance - Short!

This is just an additional look ...

... telling the same story.

Comments in the chart;

In other Asian "news"; Vietnam is now seeking 'some form of direct alliance with the US' - in order to fend off China.
Now, this is just a shot in the dark but if someone suggested such a thing 50 or so years ago ... (... by now, they would've been vertically integrated into the global Haldol end-user infrastructure, for the better part of their existence. ;-)

The PBC trying to defend the Yuan (although, they keep asserting: "we expect it to drop farther to new, record lows") by dumping their currency baskets, mostly the Yen, the Euro and the Hong Kong Dollar.
This entire move, for example, was due to the PBC;

as was this one;

They're right about that! - That the Yuan will keep dropping ... Yet, simultaneously, they keep trying to defend it. (That's the Chinese for you! Keep doing something obviously stupid and then justify it by saying: "We know!" ;-)
Bottom line is that the Yuan just keeps circling the drain, defense or not - as is always the case! -, and it's ever closer to a full surrender!

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This thing got turned back within a couple of pips of the long pivot! ;-)
(As it's been said; "If you set your entries accurately, you're gonna take a lot of heat." = Meaning, the market will get very close with it's swings.)

(still) massive SHORT
Furthermore, this pair is volatile here because of the PBC's massive FX operations, every single day! They've been firing off round after round of EUR & JPY dumps to the tune of $13-$15 Billion per instance and there appears no end in sight, as of yet. (Whatever the "secret plan" may be ... It will be a shock to see it work unless the aim is to blow themselves up because on balance, none of It makes any sense! ;-)

This probably sounds like a broken record but ...

... China continues to sell "everything", especially massive amounts of their Yen reserves. Yet, this pair hasn't gone to the sky because, simultaneously, the PBC keeps fixing their rates lower, - Go figure. (Must be part of some Dr. Evil plan?)
If not SHORT, yet, then now is the time and if it's already the case then lean into it!!

Continue to lean into this SHORT;

... now with some cushion against the PBC's nonsensical machinations.
As for that - apparently now, a mass delusion - 7.20-7.30 USDCNH range ...
... FX Option volatility in the Yuan is so over-done, especially considering that anything other than a slow-motion China collapse is just a pipe dream, at best, loading LONG on the USDCNH is about as easy as it gets - with 7.38 all but a foregone conclusion. E.g., Continue SHORT CNHJPY & LONG USDCNH

"Any crisis takes much longer to unfold and runs far deeper than anyone would expect."

Keep adding to those SHORTs, aggressively!

As strongly suggested above continue with "aggressive SHORT"s!

Chinese GDP estimate: 7.3%; actual: 6.3%. (a 16% miss!)

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A good place;

... to add those SHORTs here, off of the 50 Day Ema (~19.50)

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Disregard the above entry as it refers to an other pair - CHFJPY!

Continue SHORTs or add to them.

Boom!!

FLAT, for now. +610 pips
After massively adding to those shorts in the 19.60s, it is time for a pause for cause.
The initial minimum target of 18.00 Yen on this move has Not changed at all, so we continue to look for Short Entries to load up on this, once again.