JPY crosses/USD/JPY

Quick overview of Asian trade

  • Regional stocks around 1% lower:
  • South Korean economy grew at slowest pace in 3 years:
  • Risk trades in FX market saw profit taking ahead of tonight’s US GDP and weekend:
  • The NZD fell early on comments from RBNZ member hinting at intervention:
  • AUD has been biggest loser in afternoon trade:
  • Heavy selling of USD/JPY by Japanese bank has dulled the bullish momentum of last few sessions.
  1. Good morning Sean and all,

    Regarding EURUSD, my recommendation today is to buy at 1.2870 if dips occurs during the european session with a scalping mentality (~10-30 pips objective).
    and also buy in between 1.2815/1.2830 if dips occurs during the US session with a scalping mentality (~10-30 pips objective). Shorting at the current levels is now too risky.

    Analysis: We are getting finally closer to critical levels in the EURUSD. The market has avoided several times the encounter with the master trend line that has supported the growth of the pair from the bottom at 1.20. This trend line is now around 1.2915 and it seems that we won’t be able to avoid a confrontation today. We do not believe that the barrier will hold, however, there might be some strong buying pressure. There is also the support from the two bottoms in the 1.28x areas, that now comes somewhere in the area of 1.2870. And finally we have the very important 200 DMA at 1.2835 and horizontal support at 1.2815. Our expectation is that we will close the week below the trend line support but not lower than 1.28. If the market reaches 1.2870 during the european session, it would be a good buy opportunity for a short term rebound of 20-30 pips. The 200 DMA and horizontal support of 1.2815 will also provide a short term buy opportunity if we reach these levels during the US session. Shorting at the current levels is now too risky. All positions must be closed before the week end starts.

    Good luck!

  2. Iridium, thanks for sharing! Why do you expect only 10-30 pip rebounds? What / who would keep the pressure on the euro? As much as I know the market is rather bearish so normally I would expect bigger rebounds. We are approaching 1.28 again, is this going to be the one, the big breakthrough everybody is waiting for sometime next week? If we consider your graph as a double top or a head-shoulder, then we can easily go back to 1.2615 once the break materializes.
    β€žAll positions must be closed before the week end starts.” I agree, I never leave positions for the weekend, just because some politician makes a comment, gives an interview, the market can open with a significant gap on Monday.

  3. I am looking at small pip counts when I am trading against the trend (not in swing mode), i.e you have to be cautious. A bigger rebound is quite possible but you have to keep in mind that when you have a break out of an important trend line support or resistance, there tend to be some aggressive action. Have a look for instance at september 7th this year, where we broke an important trend line resistance and rallied heavily on that day.
    Today the picture is not as clear as on september 7th (neither very bullish, nor very bearish), and that’s why there is a chance to play against the trend.

    For now, we are above 1.29, and a good GDP number could catapult us higher. But I would not join that wagon πŸ™‚

    Between now and next week, the whole world can die a 1000 times πŸ™‚ So let’s wait and see.

  4. Iridium, congrats again! It’s working out exactly as you predicted πŸ™‚ Now I looked at the 9/7 trend line breakout. As I see it, the line was somewhere 2753, once it went above that, it really rallied sharply, it topped 3168 just a week later. On my chart the current trend line comes around 2950 and actually it seems to have been broken on Wed already. The prompt has been above the 4H 200ma since 8/20. That is 2968 now, so technically the selling pressure must really gather pace. By the next Friday, based on the previous pattern, we may have seen 2550-2650.

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