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Day trade
Trade view / 02 September 2016 at 7:14 GMT

Mild bearish bias in USDJPY today but losses could be limited

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

USD Index – After a mild morning rally, dollar buying was soon reversed with worse than expected US economic figures. As we noted after Fed chair Janet Yellen’s last press release at Jackson Hole, US data releases will be closely watched (and reacted on) with the next rate move being heavily data dependent. Today’s nonfarm payrolls could be a real roller-coaster.

Technically, the USD is in ‘no man’s land’ with conflicting views. We have a bullish channel that is countered by the fact that the inside waves are made of three waves. This normally dictates that the whole move up should be corrective. A bullish Outside Day after Yellen’s speech (at the channel base) is countered by a bearish Outside Day (at the Ichimoku Cloud top).
USD Index
Source: Saxo Bank   

We really can’t see a setup that screams out a bias (on the USD majors) and even USDJPY has conflicting views. 

USDJPY Weekly – Moving Higher in an AB=CD formation towards 108.20. We do have bespoke resistance at 103.92
USDJPY W
Source: Saxo Bank

USDJPY four-hour chart – 5 waves complete so scope for a possible correction lower. We have a channel base at 102.34. This is an important level. 
USDJPY 4
Source: Saxo Bank

USDJPY 30-minute chart – Possible bearish Head and Shoulders pattern as long as the rally is rejected close to 103.65. This is the 61.8% pullback level and the projected right shoulder. A break of the neckline at 103.15 would take the pair down to 102.25, close to the aforementioned channel base. With this in mind, the selloff could/should be short-lived so would be an intraday play only. 
USDJPY 30
Source: Saxo Bank 

Management and risk description

Parameters

Medium Term Call

Entry: Buy a break of 104.00

Stop: 103.50 

Target:108.20

Time horizon: 2-3 weeks 


Intraday Call

Entry: Sell a break of 103.15
Stop: 103.50 
Target: 102.35
Time horizon: today only

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
02 September
Dj TinTin Dj TinTin
I'm strapped in and ready for today, just about covered all areas
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
Good luck TinTin
02 September
Dj TinTin Dj TinTin
Thanks Ian
02 September
AlexF AlexF
Hi Ian your short term down side scenario is after a bad NFP or before ?
02 September
AlexF AlexF
My position got luckily sold yesterday at 103.9, back in after yesterday night at average 103.36. How would you suggest to play the NFP . I plan to put a stop at entry level (103.36) and a buy order above 104.
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I 'think' we are going to get whipshaw on NFP... its a wild guess (as it always is). I think we get USD selling then reversing. I am only taking small USD shorts this morning and will try to pinch some pips over the figures but I wont be in for long.
02 September
AlexF AlexF
So you suggest take the profit on USDJPY before NFP...
what impact you think a bad NFP will have on NZDJPY have a nice in the money long position on that one...
02 September
AlexF AlexF
The other thing a badNFP will be positive or negative for overall equity market, you could see it either ways (good as no hike...) bad as weak economy...
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
To try and predict NFP is near impossible. I have taken a short USDJPY trade at 103.60 as I have a small reversal pattern on 10 minutes and IF the HEAD and Shoulders breaks, it offers good risk/reward (as report).

USDCHF was a bearish Outside Day after a DeMark 9. The move up from yesterdays low looks like a corrective channel (4th wave) ... again selling could be limited to 261.8% at 0.9750. This could then form a larger reverse Head and Shoulders.

EURUSD we have a Marabuzo at 1.1236 from the 26/08, swing high at 1.1234 and 261.8% at 1.1234 (so limited USD selling).

I have USDCAD possibly moving to 1.3055 but this is seen as a 4th wave correction before the move to 1.3250-70 (see the report from earlier this week).

All of these technical outlooks suggest USD selling (probably a spike) then USD strength. Again, it is pretty much guess work over NFP but it gives me a technical bias. I trade over the NFP....... but only to profit levels then out (hopefully)
02 September
AlexF AlexF
Right clear thanks I ll take the profit on USDJPY in any case the move to 104 is not great from here and can re enter if we break on the down side what level would you put a stop to enter a short on USDJPY
02 September
AlexF AlexF
I got caught during the yellen speach do not want to do it again as it moved up and down before a clear direction
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am short ... my stop is at 103.90 before the figures
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
same here ...... got taken our for flay ... re-entered as had a signal to sell USD's.... got badly beaten up. I have a rule that says (in very clear and large print above my head), 'do NOT trade the figures'. I am OK if I am already in it (as I know my target and stop and reasons for the trade)......... but over it is always very very risky
02 September
AlexF AlexF
Thanks for the insight !
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
no problem at all
02 September
AlexF AlexF
took short as per your advive but NFP not giving clear way indication
02 September
AlexF AlexF
not sure we can get 102.45
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
no ... I got stop at entry ... we will see
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I have taken profit
I don't like the lack of follow through selling
02 September
AlexF AlexF
i am outof short with small profit thanks please share yoru thoughts on next steps this NFP is not clear
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I think that is the USD correction done.... if I would buy any pair it would be USDCAD.... (but I am not)
02 September
AlexF AlexF
back in usdjpy small position 103.23
02 September
AlexF AlexF
lol my saxo select as well : )
02 September
AlexF AlexF
btw nzdjpy is doing very very well as a trade
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am out for a bit .... could be a complex correction lower before the next bull run ..... and I am a bull
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
wd on NZDJPY
02 September
Cap21 Cap21
usdjpy tgt!
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
???? sorry what does that mean ?
02 September
seas seas
I think I buy a bit on dips now.
02 September
seas seas
That bounce back was strong after a lower NFP so that must mean something.
02 September
AlexF AlexF
Ian out of whichpair ?
02 September
seas seas
not much buying at 104.20, same thing when at 103.20
02 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am out of everything ....... there is no real defined trend yet ... when it does come it may be very hard to get on
02 September
Dj TinTin Dj TinTin
Not the best out come but it's all about risk management, but still trading a call 103.50 till 23rd Sept let's see what next week brings. BOJ next can I hear the sound of a helicopter in the back ground have a good weekend Ian and look forward to your expertise next week

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