I have stayed away from USDJPY pair for a while, simply because of its low volatility.
But yesterday, it showed some movements. So I feel the market has started to shake, getting close to BOJ Monetary Policy meeting on Oct 30th.
Let me start with Weekly Ichimoku.
This pair has been well supported by the thick Bullish Clouds. The current top of the cloud is 119.10, which serves as Support.
On the other hand, looking at Daily Ichimoku, you can see the cloud serves as Resistance. The current bottom of the cloud is 120.15, and the top of the cloud is 120.70. So once the price goes above 120.70, I become fully BULL.
Let’s put all the important numbers on one chart. I kept saying there are 2 range bounds – Inner range (119.40 – 120.30) & Outer range (118.60 – 121.20).
The price once broke the Outer Bottom, but jumped back up, and currently going towards the top of Inner Range.
I also indicated the locations of the clouds.
Now, how do we play this mess? 🙂
From here, you need to have your own bias.
IF YOU ARE BEAR…
You will want to sell from each resistance. I would say “Cloud Resistance” is a key value. Inner Range Top (120.30) is another key value. So you could sell from these resistances.
IF YOU ARE BULL…
- Buy at the bottom of the range (119.40, 119.10 or 118.60)
- Breakout strategy when the price breaks Resistances (120.30 – Inner Range Top, or 120.70 Daily Cloud Top. I should remind you that Daily Cloud is something that All traders in Japan including big institutions are watching!)
- You can also buy from Fib38.2-61.8% of Yesterday’s LOW/HIGH (see below)
My Bias? I would like to buy this pair, simply because Hourly 21EMA and 55EMA are well apart and looking up.
But I am only partially Bull, until the price goes above the Daily Ichimoku Cloud (120.70). Then I will just keep buying and buying all YEN pairs.
Hope this analysis didn’t confuse you. 🙂
YJ Baik – Forex.Today @ Tokyo