Dear Happy Traders,
This is NFP day. So I don’t trade until NFP announcement today. Thus no Trade Setups.
It may be a good opportunity to sit back, relax, and observe the big picture here.
Japanese YEN has been getting very strong for the last couple of days, being one of the safe-heaven currency. As a result, all yen-cross pairs dropped dramatically.
We tend to believe “USDJPY was red yesterday. So it will go down today? Wait a minute! My long term bias is Bull. Is it going to reverse and head up again??”. There are so many uncertainties on the market, and I am hoping today’s NFP can blow away those uncertainties.
I thought about writing Ichimoku study of Yen cross pairs. Typically I use Daily Ichimoku. However, I just found out Daily Ichimoku charts of all Yen cross pairs simply show “STRONGEST SELL SIGN”, that is not interesting.
Thus I would like to show Weekly Ichimoku chart. Perhaps Daily Ichimoku is the most widely used timeframe for Japanese institutions and hedge funds. However, Weekly chart is also popular.
The most interesting pair is EURJPY.
Since April, EURJPY was on the up move. However, since last week, the price has dropped dramatically, and we can observe that was because of the big & thick clouds, resulting the candles dropped down. This is a big bearish clouds, and it would be very hard to break this clouds up. Naturally, we should set the bias for EURJPY as Bear … for a long time.
The above is USDJPY pair. Overall, this is still up-trend by the fact that candles are floating above the clouds. Note that the big drop of Aug 24th, was supported by the clouds! (Wow!) Also Delayed line (formally it is called Chiko-line) is touching the candle now, meaning the market direction is neutral. However, we can read this chart as … “Thich Bullish Cloud is coming. So we can expect the resume of the up trend sometime soon. Even if the price temporarily drops, it should be supported by the clouds. Thus 116.0 – 117.0 area should be EXTREME bottom”.
The last pair is GBPJPY. Even though this pair has dropped 1500 pips (!!) in 2 weeks, the weekly chart still shows “STRONGEST BUY SIGN”. We can expect the up move will resume soon as the thick Bullish cloud is coming toward us. Temporarily the price may go down further. But remember the EXTREME bottom should be 180.00 ish, as this is the top of the Cloud.
Hope this analysis helps you develop your long-term bias. Please remember these charts are WEEKLY charts. So I was talking about the next 4-10 weeks!
YJ Baik – Forex.Today @ Sapporo