Trade view /
30 August 2016 at 7:15 GMT
USD Index: Although we posted a Doji style candle yesterday on the daily chart there is no clear indication that the upwards move in the US dollar is stalling. However, we do expect some mixed and volatile price action to still be present as we move higher in the bullish channel formation.
Source: Saxo Bank
I have taken a long trade is USDJPY and here is why...
Monthly: For the last three months dips have been bought under the 50% pullback level of 100.57. Although we will post another inside Harami candle (indecision), this does give a mild upward bias.
Weekly: Completed a bearish Elliott five-wave pattern at 100.44. The choppy price action that has caused the inside Harami candles on the monthly chart can be seen as an AB=CD formation. This would take the par to 108.20.
Daily: Dip buying after Fed chair Janet Yellen’s press release on Friday resulted in the pair posting a bullish Outside Day. This is often an indication of the start of a new upwards trend. Resistance is seen at 107.75.
Intraday (four hours): Looks to be forming a bullish Elliott Wave pattern with the dip being bought overnight (4th wave) close to the 161.8% extension level of 102.16. There is no clear indication that the upwards move is coming to an end so we have bought at market (102.15) looking for a move towards 103.78, the 261.8% extension level from the 99.53-101.15 move. Although we do have a congestion area at 102.50, we look for dips to continue to attract buyers.
Management and risk description
Slight caution is needed with the one hour chart close to an exhaustion count. We will monitor price action close to 102.50.
Entry: long at 102.15.
Time horizon: two or three sessions.
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more