UnknownUnicorn39208297

230125 - USD/JPY - Trade Setup

Short
DAILY CHART
  • Trend: Following 4 consecutive Break-Out / Retests, hugging the 21 EMA tightly,
  • S/R: USD/JPY has arrived at significant Support/Resistance Zone of 126 to 131.
  • This zone happens to correspond with a swing point / accumulation zone in 2016. The pair has been trading above 131 since, and has only broken below 131 again in pas 2 weeks.
  • #DXY Dollar Index has been overlaid. USD/JPY has been trading above DXY since 2016, meaning JPY has been a cheap component in the index.


4-HOURLY CHART
  • Trend: Price is ranging for almost 2 week, in a rather large channel.
  • S/R: Price has tested 126 and 131 a few times.
  • Market Bias: Remains short.
  • #DXY is still below USD/JPY on 4H Timeframe.

1-HOURLY CHART
  • Trend: Appears up, with wild swings. Price Action angles of the down-waves are increasing, indicating stronger sell-pressure.
  • S/R: As on the 4H-chart.
  • #DXY remains below USD/JPY. #DXY and USD/JPY are diverging. No major buy-pressure on DXY.

NOTE
#DXY is important for a primary major pair. Whatever the USD does will affect the primary pair.

SETUP
  • The market is short and ready to break 126
  • Short-order at 130, stop at 132, first target 126, (first 2R profit)
  • If it works out, the down-move will be fast. That's the main reason for going short here, and I want to be in it before it moves.
  • By going short here, I can keep the stop tight. Once it moves, the stop would have to be wider.

Not investment advice, just gut feeling. I could also rationalise this for long position. Remember; the 126 support is a tough one. And Bank of Japan may not want it broken, and could intervene.

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