USDJPY: Trading options for US Unemployment news tomorrow

Analysis for US Trading session (Sept. 1 2017)

The USDJPY trading pair has been heavily based on US news this month. Below is a general outlook to interpret this trading idea.


1 Hour SETUP
USDJPY has been in a range of 108.70-110.70 since around August 16th. After a secondary H4 resistance test on the 25th (marked on chart), the pair dipped to a new low, seemingly breaking out of range.

However, due to consecutive positive US news figures, the pair has rallied back to potentially test a previous high of 110.640.

Since trading has been based on both bigger volatility around US and London session as well as positive US news, I expect the pair to consolidate around 110.000 before reacting to Unemployment figures tomorrow.

WHAT TO DO WHEN NEWS IS RELEASED?

On my chart, I have 2 possible scenarios. They are both in reaction to news so there is no clear trade bias before then.

Price will retest .382 level fib here.
1. Depending on US unemployment news tomorrow,
The pair may continue Bearish trend,
retesting previous trend High's

2. Consecutive US positive data has run out of steam
and doesn't meet forecasts sending, sentiment
bearish. This will mean a 50% retest target.

For option 1, I still say continue bearish trend because on the higher timeframes, the pair is still bearish along with the Dollar Index (DXY). I also expect hurricane Harvey to play a roll in negative US data next month, meaning, my sentiment is still bearish on this pair.

Intraday however, I think a retest of previous (recent) high's are important to either induce bearish volatility, or to confirm the overall trend in general.

Thank you guys for your time! As most responsible people would say... these are my ideas and I am in no way telling you which way you should trade. Please monitor your risk analysis and be careful trading around critical news day's and times. In some situations, although you may see an awesome trade, it might be better to sit on the sidelines and protect your capital if you are at all unsure. Keep those accounts safe!

Remember... You can't go broke staying out!

USDJPY

Comment:

Thank you guys for your views! And the person that liked it lol! Happy trading tomorrow! Stay safe everyone.

Comment:

I will check in tomorrow about an hour before US Data to see how the trade is shaping up. Have a good night (for everyone in the states who might be going to sleep at this time)!

Comment:

So far, performing as expected. Based on US numbers from the past, it can be assumed that the numbers could be positive. Earlier this week the ADP Non-Farm Employment change was 237k vs 185k, while unemployment claims stayed relatively the same (estimate from earlier in the week).

The troubling factor is that the employment change beating estimates so much, might translate into a lower earnings data reporting, meaning more people might have been hired but wages did not go up. In this case the news could be a reversal of expectations, which is why I have 2 options on the trade. This has happened numerous times in the past. Happy trading everyone!

Order cancelled:

Option 2 won out as I indicated. Trade cancelled because TP levels got hit within the minute. Possible retracement after initial move followed by continued bearish trade to retest low or make new low.

Comment:

Tapped 50% fib and currently on target to hit 23% retracement. If there is enough volatility, might take a quick short trade for 10 or so pips.

Trade closed: target reached:

Took a brief short after full retracement for 10 pips.