USDJPY – turning south ?
My bullish view (see previous ) on USDJPY turned to a very efficient trade. Pair advanced relentlessly on a positive geopolitics and few other macro development – but we are not much concerned about macro, don’t we? Chart has everything we need for a good trade… Friday looked like profit taking before weekend.
Now, I believe it is a time to quit our longs and start building up short pisitions. Our weekly patterns are still bearish and we are approaching strong resistance levels.
So, if this is a turning point for a pair, let’s see what our sell signals. Again, it all depends on our working time-frame and money management. If you are like me and prefer short-term impulse trades, then enter on break-out of 108.95 – last week’s minimum or place limit sell at 109.25. One can also enter with market order on opening early tonight (Asian session). These levels also good for scaled entry – splitting the total order size in 50/50 or other combinations.
More cautious and generally long-term traders will place sell limit orders around 110.25-110.50 area – which is strong support areea on a Daily chart.
Below 4-hour chart will help us to determine shorter-term dynamic. Strong supports are at 108.07 and 106. 98 – those will become bounce levels, so long-term sellers compelled to take some profit from the table there, while short-term buyers (including me) will use them for easy “quicky trades”.
Summarizing – I expect next weeks bearish move for USDJPY – which is also indirectly indicates at risk-off sentiment and possibly sell-off at equities and bullish action for gold. Please, however, use your discretion and never forget that trading is a game of probabilities. There is no certainty on markets and therefore, prudent risk management and trade quit strategies are mandatory in this game. In other words – use stops and size your exposure wisely.
Happy trades !