Assessing Dollar Yen Medium Term Trend in the Market

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USDJPY Technical Analysis

We will begin by saying the Foreign Exchange (Forex) market is filled with ambiguous signals. We assume the market is awaiting the Fed and European Central Bank (ECB) monetary policies in December and it is heavily reflected on numerous currency pairs.

After analysing multiple currencies we are focusing on the Japanese ten (JPY). There are medium-term indications that JPY is due to strengthen in the market. CADJPY and USDJPY where the most attractive pairs. As we also noted USDCAD may reverse lower based on the monthly chart we are dismissing CADJPY and place our attention on Dollar yen.

USDJPY Weekly Chart

Please click on the chart to enlarge:

USDJPY Weekly Chart 10/11/15

USDJPY Weekly Chart 10/11/15

Although we can easily use the monthly chart we prefer a weekly entry. The weekly close on 6 November, 2015 has painted a right-hand shoulder of a classic H&S. We were uncertain whether the upper resistance will hold as a false breakout was noted on 5 July, 2015 weekly session. Nevertheless it appears the resistance is holding while the shooting star that was recently painted on the daily chart concretes the possibility for USDJPY weakness.

What also makes a short trade attractive is the fact the current price is near the resistance, which means an excessively large stop is not required. We chose to be fairly conservative with our target and aim for the lower support, which is the neckline of the top H&S. We hope the weakness will begin this week, possibly as soon as tomorrow.

USDJPY Trade Alert Details

USDJPY short at market price (123.17)
Take profit: 118.54
Protective stop: 124.83
Risk Ratio (RR):  1 : 2.8
Estimated duration: 21 days

12/11/15 UPDATE: USDJPY is trading at 122.57 at the time of this writing.

Please click on the chart to enlarge:

USDJPY Weekly Chart 12/11/15

USDJPY Weekly Chart 12/11/15

We are closing 20% of the short trade at market price and shift the protective stop to 123.24. We are pleased with the recent weakness.

15/11/15 UPDATE: USDJPY is trading at 122.38 at the time of this writing.

Please click on the chart to enlarge:

USDJPY Weekly Chart 15/11/15

USDJPY Weekly Chart 15/11/15

We are closing 10% of the short trade at market price and shift the protective stop to 123.16.

16/11/15 UPDATE: As we neared the London fix USDJPY broke above its daily high, triggered the protective stop at 123.16. We were able to realize profits over the short trade

Assessing Dollar Yen Medium Term Trend in the Market
As USDJPY short trade is closed this page can now be accessed by all traders. Open trades are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
Assessing Dollar Yen Medium Term Trend in the Market

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Assessing Dollar Yen Medium Term Trend in the Market

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Assessing Dollar Yen Medium Term Trend in the Market