USD: JPY – Potential central bank set-up

Dollar: Yen caught my eye when looking for charts that are interestingly placed leading into what may be a couple of big announcements from the Fed and ECB.

The hourly chart has the early look of a possible double bottom.  To set up as a bullish reversal, price ideally needs to stay above today’s low. It then needs to break above the peak between the lows (dashed resistance line).  

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
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6 Responses to USD: JPY – Potential central bank set-up

  1. dv34 says:

    I would agree, I am getting ready to sell risk a little higher.. AUDUSD, Dow, SP500, looking to buy EURUSD 1.2148 to 1.2640 again a bit lower… hopefully all very shortly… I personally think a major turn in the markets is not very far away… and likely within the next week

    • dv34 says:

      Missed my EURUSD entry 1.2148 as was asleep (would have been a beautiful trade up 5.5:1 so far), tried to short USDCHF (a nice inversely correlated EURUSD proxy trade) again at 0.9874, missed it by 1.5pips. Although the markets are rallying, I have my orders still set to short them soon not very far away. What is interesting is AUDUSD looks very bullish on daily + weekly and even intraday, but I think it is forming a broadening wedge on 4hour at top of channel and 78.6% weekly retracement, so think it will rally to take out stops and then fall back to the bottom of the channel… same with indices, they look like shorts to me, mainly based on monthly charts Dow 13211 – 12660,11600, SP500 1408 – 1217,1092. big green bars into resistance = Sell…

      • dv34 says:

        Although bets are on QE3, why would the fed use its ammunition when the markets are at 85% of post GFC highs?, I would only engage QE3 when the markets are in pain and dismal, not near record highs… makes no sense – although markets rarely do..

      • Ric Spooner says:

        Hi DV,

        Friday’s employment growth might change things a bit as well do you think? Fed might sit back to see if employment growth can continue to improve without further policy easing?

        Ric

  2. dv34 says:

    I am a technical trader, so fundamentals mean little to me… Govt Statistics can be bent (and often are) I simply look for low risk/ high reward to risk trades… Interestingly the VIX closed at 15.64 Friday which is the ‘complacency zone’… if I get stopped out so be it – with my strategy I can be wrong 70% of the time and still make money… it’s not about being right, it about making more than you lose in the long run.

    • dv34 says:

      Although number was higher than June – NFP unemployment as a % went up from 8.2% in June to 8.3% in July, yet the market rallies…?? makes no sense… which is why I ignore it… what matters is where traders put their money and print it on the charts

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