I have posted several times about the possible EURJPY Swing Trade setup. The basic idea is to take the Fibonacci of the big sell-off from Aug21-Sep4. Though the pullback was a bit stronger than expected (a little beyond 61.8%, I would call it still valid as long as it doesn’t go beyond 78.6%). The target is back to Fibonacci 0%, that is 132.00 ish.
Both Weekly and Daily Ichimoku suggest more possibility to go down.
Now looking at Hourly chart, the price already started to reverse, making Lower Lows and Lower High. I am sure the aggressive traders already sold this pair from “Lower High (1)”. I suggested previously it is safer to sell from “Lower High (2)”. (We don’t need to be the first one to ride the reversal)
However, the last 10 candles are stuck at the same level (135.60-135.80).
Therefore, I would like to play a breakout strategy. I would like to sell this pair when the price breaks the current floor of 135.55-135.60.
However, I noticed there are 2 important Pivot Points are there – Daily Central Pivot (DPP) and Weekly Central Pivot (WPP). Thus if you want to be super conservative, it may be better to wait to see the break of these pivot points.
You selling price will be lower. But hey, we are talking about over 200 pips trades. I think it may be worth the wait.
One final comment – H4 Stochastic is heading up. So I wouldn’t be surprised even if the price moves up a bit. Please be aware that this setup is valid as long as the price stays below 136.42. (If the price moves higher than 136.42, then it will form “Higher High” on the Hourly chart, instead of “Lower High”.
I hope you can enter this trade today, and move your stop (SL) to even before FOMC tomorrow…
Hope this setup helps you earn some extra pips.
YJ Baik – Forex.Today @ Tokyo