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Short term
Trade view / 08 August 2016 at 7:24 GMT

USDJPY signalling temporary counter-trend rally

partner and technical analyst / 3 c analysis
United Kingdom
Instrument: USDJPY
Price target:
Market price:


Third-quarter signals to sell at 106.22 on USDJPY have been close to the high and despite last month’s 7 ½ Big Fig rally from 100.00 the Fig signals in each of the last two weeks have remained bearish. The Fig is also close to a 50% pullback to the entire 2011-15 bull-run.

These have been confirmed as rallies have been attracting sellers at the 200-week and 100-day average rates. However, last week’s losses were mostly recovered on Friday which has ended a sequence of lower daily highs and switched shorter-term signals to bullish. Any gains are likely to be temporary though as signals also suggest that this will be a counter-trend rally.

Management and risk description

Allow room to buy the dip and raise the stop to the entry point if the 1st target is met


Entry: market and 101.22, Friday's opening trade.

Stop: 99.90, just below July's base

Target: 103.80, the 13 day average rate and 104.70, the 50 day average.

Time horizon: this week.


USDJPY Daily - lower highs ended

USDJPY Quarterly - 50% pullback
 Source (all charts): CGQ

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
sam wightman sam wightman
Hi Steve
I am following USD/JPY , I see you want to Buy @101.22, could this be a good short trade from current market.?
Steve Lucas Steve Lucas
Hi Sam...we may get a dip, but rather than wait for that I have bought now and then will buy the 2nd tranche at 101.22....Of course you could short if you think we will go lower, but I am trading this from the long side for now.
seas seas
Crazy spikes in this pair. Good to have a plan like this with deep stops!
Steve Lucas Steve Lucas
The stop is key - and if that stop is far away (lately stops have been wider due to volatility) then what changes is the amount at risk, so in the case of yen and sterling recently those amounts have been smaller while risking the same capital.


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