Trade view /
24 August 2016 at 7:39 GMT
USD Index – In our video report on Tuesday we mentioned the USD index would likely to stay within the 94.90-94.15 range and our preferred setup was to buy on USD dips. We made a 94.19 low yesterday and have moved to the upside. Prices are now at mid-range and we are likely to see choppy trading today until an eventual breakout.Choppy USDJPY
Source: Saxo Bank
The medium-term picture remains mixed with this timeframe highlighting a possible bullish Head-and-Shoulders breakout (bullish) while the daily channel highlights a corrective channel (bearish)
This uncertainty is reflected in most of the FX majors but selling into gains in USDJPY today offers a good set up.
Monthly – The long-term bias is still skewed to the upside with a potential bullish reverse Head and Shoulders forming. However, the last two months have posted inside candles, a clear sign of indecision at current levels.
Weekly – We can clearly see a completed five-wave Elliott-wave formation. However, we cannot rule out a possible fifth wave extension, possibly to form the Head of a bullish reverse Head-and-Shoulders pattern. Far too early to tell.
Is there a reverse head-and-shoulders pattern in the offing?
Daily – Broke the channel to the downside but have since posted five inside soldiers (candles) as we consolidate ahead of Jackson Hole.
Consolidation ahead of Jackson Hole
Intraday – This consolidation has resulted in a symmetrical triangle being posted on the intraday chart. This has an eventual bias to break lower (we wouldn’t hold too much of a bias, with the next move likely to be based on fundamentals).
The trend of lower highs and our bespoke resistance come in at 100.75. This is our prime short entry today (only).
Symmetrical triangle on the intraday chart
Management and risk description
selling at 100.70.
intraday 100.02 (triangle base). Medium term possibly 98.00 (congestion area).
today to trigger.
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more