How to trade this plan
1. Support and resistance zones shown in green and pink with arrows indicating direction. Bulls buy at support and bears sell at resistance.
2. Keep in mind that when price breaks through support the level will be tested in future as resistance – this is called role reversal.
3. Market direction indicated by 21 and 55. Take note of where the 21 is in relation to the 55 and where price is in relation to the 21. Also take note of the width between the two moving averages. If price is below the 21 you may consider looking for selling opportunities. If the 21 is dynamic resistance then if price falls from the 21 it predicts a lower low – the opposite applies when the 21 is dynamic support. If the 55 is dynamic resistance then if price falls from the 55 it predicts a double bottom – the opposite applies when the 55 is dynamic support.
4. Direction of price is indicated by 5 and 8 MA’s and stochastic cycles. Remember that when you line up higher and lower time frames, price is going in the same direction. The goal is to line up market and price while using support and resistance as your leading indicator.
5. Pay attention to reversal patterns on higher time frames when in a trending market – a reversal pattern could mean the end of a trend. Keep in mind that a reversal pattern that is not at support or resistance is meaningless.
6. Pay attention to reversal patterns on lower time frames when confirming your entry and if you want additional confirmation wait for a 5 8 cross on M5 or M1 before entering your trade. Remember – we enter on the second chance on the 5 minute chart.
7. I have added a summary under the H1 chart indicating observations and trade plan.

a. Please read Kate’s post on Forex Major Currencies Outlook everyday so you are up to date with the latest news. You can follow Kate here
b. Please be aware of risk events for the day by using the Forex.Today calendar
c. Watch Wayne’s webinar daily at 13:30 SAST or catch the recording on the Forex.Today Youtube Channel




Price is currently at WR2 and the psych level of 103. Price has failed to break resistance during Asia though until a reversal pattern is confirmed by a lower low, I remain a bull and expect further Yen weakness. Should price fall from here the plan is to look for buying opportunities in the green zones. Keep in mind that the 5, 21 and 55 EMA's are dynamic support. Don't let stochastics guide your trading in a trending market. Oscillators are used for ranging markets. Your goal in an uptrend is to continue buying the higher lows until a reversal pattern, followed by a lower low, appears on a higher time frame (H1, H4, daily). A lower low for this pair would be below WM3. Until that happens, this pair is in a bullish trend and we continue buying at support while managing our risk accordingly.

One thought on “Ninja (USDJPY) 310816”

  1. Miles says:

    Great analysis and advice!
    “A lower low for this pair would be below WM3”, do you say that based on pivot theory or on price action levels?
    Thank you

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