Intraday Strategies: Crude oil and USDJPY

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Crude Oil Intraday Strategy

The Fed FOMC statement and economic projection is they key event for today’s session and great volatility is likely to be seen when the statement is released at 18:00 GMT. There is a 30% chance for the Fed to hike rates, which will in turn strengthen the Us Dollar in the Forex market and may have a bullish effect on US crude oil. We are however anticipating the Fed to remain on hold and downgrade the economic projections.

The intraday strategy is intended for the market’s reaction to the FOMC statement.

Crude oil 4hr Chart

Please click on the chart to enlarge:

Crude Oil 4hr Chart 17/09/15

Crude Oil 4hr Chart 17/09/15

What we are looking for is a dip towards the 100 Moving Average (MA, in black) or the lower support at 43.50 when the FOMC statement is released. We highlight there is no entry to short crude oil and the strategy only becomes relevant if the price does retrace lower as a result of the FOMC statement.

If the support is held the price is then expected to post moderate gains towards 47.00, which is the target of our technical strategy.

USDJPY Intraday Strategy

This strategy will also be used for our global trade alerts. A statement by Japanese officials was made earlier this month that called the Bank of Japan (BOJ) to expand the Quantitative Easing (QE) program by up to JPY 10 trillion. Such stimulus is more than likely to weaken the Japanese yen against a basket of currencies in the Forex market. We would have issued a trade alert to long USDJPY but the FOMC statement posses a great fundamental risk for long trades.

USDJPY Daily Chart

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USDJPY Daily Chart 17/09/15

USDJPY Daily Chart 17/09/15

USDJPY is currently testing the upper resistance as you may se from the daily chart. Failure to break above may yield to corrective weakness towards the lower support level (in blue), possibly as a result of the FOMC statement. The weakness may even extend beyond the nearest support and retrace towards 188.40, which is expected to hold on first test. The weakness (should it occur) may provide a fairly neat fundamental entry for long positions as the BOJ is currently expected to act at the end of October 2015. Unlike our prior intraday strategies this may very well be a medium-trade,

We must highlight that if we are incorrect and the Fed does hike rates in today’s meeting moderate gains may be seen in USDJPY and slippage is the most likely occurrence. The odds for a rate hike in our opinion is minimal, especially ahead of the Greek elections on Sunday and general elections in Spain that are due in December.

18/09/15 UPDATE: Our prediction that the Fed will not act in September and downgrade the economic projections has been successful. Although crude oil failed to deliver the required level for corrective gains, USDJPY suffered from heavy losses following the Fed’s monetary policy.

Please click on the chart to enlarge:

USDJPY Daily Chart 18/09/15

USDJPY Daily Chart 18/09/15

In our global trade alerts we have issued a long trade in EURUSD, which we closed with approximately +140 pips profit.

22/09/15 UPDATE: USDJPY recovered off the support level and is still trading within the triangle. A breakout may indicate the upcoming trend in USDJPY.

Please click on the chart to enlarge:

USDJPY 4hr Chart 22/09/15

USDJPY 4hr Chart 22/09/15

Last Updated on September 22, 2015