USDJPY dropped dramatically yesterday, and now at the critical place.
Nikkei is up & Shanghai is up today so far. (1AM EST) Sounds like RISK-OFF day?
Below is Weekly Ichimoku. You can see the candle is now touching the top of the clouds. Thus I assume the price should go up from here.
This is another view of the current situation (above) on H4 chart. You can see the current price is at the bottom of Outer range. (118.60)
Thus I would like to build up the Long trade plan.
Here is the plan.
The price just made Higher High on M15 chart. So I would like to Long from the next Higher Low.
Wait a minute! Something is wrong?
I know. Typically, we will short again, right? Below is our typical setup – Short setup. The idea behind this is… “Yesterday was down. So it should go down today, too”.
Thus we take a fibonacci of Yesterdays’s HIGH and Yesterday’s LOW. And we sell from somewhere between 38.2-61.8%, right?
This is a perfect setup, and you should follow this… if you are bear.
Only reason why I would like to consider to buy this pair is… the price is touching Weekly Ichimoku Clouds, and at the bottom of the range.
So… everything depends on your Bias again.
Hope this helps (or confuses?) you build your own plan.
YJ Baik – Forex.Today @ Tokyo