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

Breaking wedge points to bearish turn for USDJPY

Analyst / PIA First
United Kingdom
Background

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

USDJPY

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. 

USDJPY M
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.

USDJPY W
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. 

USDJPY D
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.

USDJPY 4
Source: Saxo Bank

Management and risk description

Parameters

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
13 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Taken a EURGBP short also on a nice set up
13 October
AlexF AlexF
Hi Ian was good day out of USDCHF and USDJPY do you see GBP rebounding ? u favour eurGBP for that ?
13 October
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

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail