Trade view /
27 May 2016 at 7:16 GMT
USD Index – Continued the move to the downside but the selloff stalled close to the daily Ichimoku Cloud base. With the Elliott wave five-wave bullish formation now considered to be complete, the bias remains negative. However, I would expect some volatility this morning with immediate dips likely to find buyers close to 95.00. Our preferred trade for the index is to sell into rallies.
- One currency pair that looks likely to push against this negative USD bias is USDJPY. We have said for some time that the medium-term focus remains bearish, with the target area being 101.67-100.57. This remains true.
Long-term focus for USDJPY is bearish
We have seen mixed results for the last seven days, with the pair holding broadly within our bespoke support and resistance levels of 109.44 and 110.68.
USDJPY bespoke support and resistance
This has resulted in a large consolidating triangle on the intraday chart. This formation has a bias to break higher. This is not my favourite formation to trade because what now looks to be a bullish pattern, with a break of support, can turn into a channel. Only the fact that the base line is close to bespoke support is attractive. I would suggest a half-size trade as against the longer-term view.
USDJPY consolidating triangle
Management and risk description
Entry: Buy at 109.46
today to trigger (or cancel), 2-3 sessions for the target
— Edited by John Acher
Non-independent investment research disclaimer applies. Read more