Day trade
Trade view / 13 October 2016 at 7:24 GMT

Breaking wedge points to bearish turn for USDJPY

Analyst / PIA First
United Kingdom
Instrument: USDJPY
Price target:
Market price:

USD Index 

Easily pushed passed the 161.8% extension level of 97.62 yesterday. We are still cautious around these levels as signals are overbought but dips continue to attract buyers. Measured move target is at 98.44. Current price is at 98.00.

Is the Dollar Index overbought?
USD Index
Source: Saxo Bank


Monthly – Still holding Inside Bars on the monthly chart highlighting a degree of indecision. Reverse trend line resistance is seen at 104.60, close to the overnight high. 

Source: Saxo Bank

Weekly – Although we have completed a bearish five-wave pattern (Elliott Wave), there is little in the way of bullish reversal patterns. In fact, a stall at current levels and we could be forming a bearish descending triangle formation with solid support seen at the 100.00 Big Figure.

Source: Saxo Bank

Daily – Very messy outlook. Are we in a bullish corrective channel formation OR a descending triangle formation? This timeframe really gives away little. 

Source: Saxo Bank 

Intraday (4-hour chart) – Stalled very close to the 261.8% extension level of 104.69 (from 100.08-101.84) and we look to be forming an Ending-Wedge pattern. Price action inside this formation is expected to be mixed and volatile until we breakout. Trend line support is at 103.50, bespoke support at 103.56.

The six-, four- and two-hour chart highlight a bearish Outside Bars. There are two ways to play this outlook. Either sell rallies close to 104.20 with a stop above 104.70 or sell a break of 103.50.

Source: Saxo Bank

Management and risk description


Entry: Either sell rallies close to 104.20 or sell a break of 103.50.

Stop: Selling at 104.20 stop above 104.70. Selling a break of 103.50 stop at 103.90.

Target: 102.80.

Time horizon: 2-3 sessions.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Taken a EURGBP short also on a nice set up
AlexF AlexF
Hi Ian was good day out of USDCHF and USDJPY do you see GBP rebounding ? u favour eurGBP for that ?
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Yes ... still playing EURGBP tp the downside... most moves still seem USD based at the moment


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