Medium term
Trade view / 10 October 2016 at 7:32 GMT

Dip buying in EURJPY

Analyst / PIA First
United Kingdom
USD index: Volatile trading on Friday resulted in the index posting mild net losses with spikes seen in both directions. We would expect this volatility to continue into this week with rallies sold and dips bought.

Intraday support is seen at 96.22 (breakout level) with bespoke support at 96.27. However, with bearish Outside Bars seen in the six, four, two and one-hour charts (from Fridays high) rallies are likely to find sellers (mixed view). 

USD Index
Source: Saxo Bank 

Going to steer clear on the USD today and concentrate on EURJPY. 

EURJPY (monthly): Pair sits in a large triangle formation. For the last three months we have consolidated and posted indecisive Inside Months near the Fibonacci confluence areas of 115.36-111.551 (61.8% pullback and 161.8% extension). 

EURJPY M
Source: Saxo Bank 

EURJPY (weekly): Posted 12 Inside Weeks. Elliott wave dictates that the most common pullback levels for a corrective fourth wave are 23.6% and 38.2% of the third wave. These levels are located at 116.65 and 121.30. 

The latter is also close to the corrective channel top.

EURJPY W
Source: Saxo Bank 

EURJPY (daily): We have broken out of the corrective channel formation to the upside (blue). A full AB=CD formation takes us to 121.41, just above the 38.2% pullback level. 

We have seen some selling from Thursday's high and reverse trendline support is located at 114.49. As long as we hold a daily close above this level, then the bias remains bullish. 

EURJPY D
Source: Saxo Bank 

EURJPY intraday (four-hour chart): Sellers emerged close to the 261.8% extension level of 116.08 (from 112.06-113.59) and previous swing highs from September 9 and 14. We have channel support and possible right shoulder of a reverse bullish Head and Shoulders pattern at 114.09. The 50% pullback level of the last move higher is seen at 114.16. This is our prime area to get long. 

EURJPY 4

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Source: Saxo Bank

Management and risk description

A move through 116.50 and stop goes to entry.

Parameters

Entry: buying close to 114.20-114.00.

Stop: hard stop at 113.00 or a daily close below 114.50.

Target: 121.20 (38.2% and AB=CD), approximately 6/1 risk/reward.

Time horizon: three to five weeks.

— Edited by Michael McKenna

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Non-independent investment research disclaimer applies. Read more
10 October
Andrew Perkins Andrew Perkins
We looking to hit 114 today or tomorrow stuck at 115 at the mo
10 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
it is a call for this week .... not sure when it will trigger. Very limited on figures at the start of the week. Would like it to trigger before FOMC minutes on Wednesday
10 October
Andrew Perkins Andrew Perkins
just holding out for the mo
10 October
AlexF AlexF
Hi Ian, quite busy this week, go long on USDJPY and USDCHF this morning up +60 pips, what woudl be targets so I can place SL and PT on my trades.
10 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
261.8% fibs is at 104.68... channel top at 104.79... DeMark will post a correction 9 on the daily chart tomorrow
10 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
USDCHF wary of an Ending wedge .... trend at 0.9844
10 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
breaks there then 0.9950
10 October
AlexF AlexF
Thanks Ian for that hope u had a good day, was good on equity and forex
11 October
AlexF AlexF
Hi Ian still in USDCHF nice trade so 0.9950 would be a good PT. anything else you are doing ? EM currencies such as USDTRY ?
11 October
bkutlar bkutlar
Hi Ian, my buy order has been triggered at 114.2. Do you have any update for this trade?
11 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Hi ... nothing yet ... its is only just there... medium term call ... bit too early to comment either way
12 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Hi Alex ... think its a correction day in the USD today
14 October
AG11406 AG11406
is this still on?
14 October
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I think it will range between 115.20 and 114.00 for sometime

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