Throughout the festive period, I was long on Yen. The reason for this was purely technical and I took advantage of profit taking as the year closed. Profit taking gave the Yen some strength and this happened when this pair was overbought in the daily chart. The strategy for this currency pair is to follow the trend and this is what I usually do when trading the beast.
The monthly chart stochastics is oversold and November candle was strongly bullish, there was a confirmation for this bullish trend since December candle ended up being bullish. I will look to follow the trend and enter only when there is an oversold stochastics in all time frames I’m trading. In this case, I’m trading the daily chart and since overbought and oversold conditions are not frequently formed, I will go long today since there is an oversold stochastics which formed on Friday.
Entry will be in the 1HR chart and as I type this, there is a very strong bullish engulfing candlestick which has formed at the resistance zone. I will look to enter after this candle closes and trade as follows:
Stop Loss: 143.50-safe stop loss considering the volatility of this pair
Take Profit: 1:3 Risk reward.