Nikkei Index has been jumping up and down today (Aug 26) so far, and I have to say the market has not been calm down yet.
I even think it may be better off, not to trade Japanese Yen pair today (unless you are carry trading…).
Anyhow, if you still want to trade USDJPY pair, here is the setup. (The same strategy can be applied to GBPJPY)
During Asian hours so far, JPY has been weakening all day. The question is… how about London open? how about NY open?
Since the beginning of the trading day, the price came up from 118.50 to 119.60 ish, and still rising. The big question is…
“IF THE PRICE COMES UP TO THE RESISTANCE OF 120.40, WILL IT BOUNCE DOWN? OR BREAK THE RESISTANCE AND KEEP RISING?”
I would like to monitor the price action around London Open (1 hour from now), and see if the price comes back down, or continue to rise.
My long term bias for this pair is Bull. But for today, I am not sure. I will just try to follow the price actions around 120.40 resistance level. If the resistance holds, Sell from there. If breaks the resistance, Long from the pullback.
As of now, Nikkei is back above 18400 level. If it holds above 18,000 at the end of today, I will consider the market becomes stable again.
YJ Baik – Forex.Today @ Tokyo