head-bg-right

All posts

FOREX Chart Of The Day: USDJPY KEY LEVELS

Are you trading through the US Election?

USDJPY should be a chart to watch.

In this video we break down the currency pair and identify the key levels to watch through the market volatility.

Watch the video to learn more…

Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, head currency analyst.

Practice trading with a demo account
In this video, we’re going to go over USD/JPY. An interesting chart to watch ahead of the US elections.

So, I want to talk about USD/JPY. Two sorts of reasons, and obviously, the elections coming up. Want to be looking for some potential Dollar strength after what’s happened previously on the USD/JPY chart, which we’ll go over in just a second.

The price is also approaching intervention levels as well, which is also something interesting to take a look into. Also the yields are rising in the US 10-year yields, for instance, which could see USD/JPY break above 105 as well, and head a little bit higher.

Three reasons to be looking at USD/JPY, but what I’m going to do is point out some key levels of interest ahead of the election.

If we go back to what happened in 2016 and just see where the price was. Now, the price was at a very different level. It was at what I would call the intervention levels. They’re called intervention levels because this is where the Bank of Japan typically does intervene in the markets.

It’s around that 100 area where the market kind of presses into, doesn’t really want to break below that point, and we usually see the Bank of Japan intervene. See the Yen weaken significantly from those levels, which we also saw in 2016.

We actually saw it in 2019 and 18 as well. Didn’t quite make it down to the 101s, but in that sort of zone, that one 100 to the sorts of 104-105 area. This sort of range is where we see some kind of intervention.

What happened last time on USD/JPY, we saw price actually break through the lows initially and close higher, and then we saw a USD/JPY rally to the upside. What I’m looking for again to happen through the election.

We’re looking for the market to come break through these lows initially. That’s what I’m expecting, a break of that sort of 104 level. We’re then looking for the market to react from this and break to the upside.

Now, there is a long-term sort of trend line on here as well, which could be interesting to watch out for. It stems all the way back from the start of July, end of June. I quite like the idea of if the price was to sort of break out of this trend, we could see that longer-term upside to USD/JPY as well.

So a couple of different areas I like the look of a lot where the price is now. I like the fact that price could break through that level, react, and see the markets rally to the upside. I also like the idea of sort of intervention levels down here for instance, in sort-of the 101s the 100s.

So this zone that we’ve got here is a decent area to watch for some long positions as well. If the Dollar was to dip a little bit further than normal, in these kinds of circumstances, then we could see a reaction from this 101 area as well, and see some further upside from here.

But quite like the idea of price for the USD/JPY to rally regardless. I want to see that sort of strength come through. I think we may only rally in the short term anyway to the end of the year, and then see some Dollar weakness throughout the rest through the start of the year then.

So, looking for a little bit of upside to this market. And I like the fact that prices around this kind-of supporting point at the moment. We’ll see how this reacts in the election.

If you do look at sort-of trading around elections, I would look for lower-risk opportunities, obviously. You can also watch out for these big levels. Look for how you can sort-of entering the market is if, price breaks through or one technique you can look at is if the price was to break through and start heading lower and breakthrough these lows, you could look to potentially enter a buy stop order at the level you’d want to be in. Because then what it would need is the price to come back against that initial move in order to move further to the upside.

So, for instance, if you were looking at this sort of situation down here. At the start of March on USD/JPY may be, you were looking at the 104 level because the price was approaching this huge zone.

The market then breaks through that candlestick with that bearish candlestick. You could have put a buy stop order at the level you want to get into. Stop loss below the current low when price breaks through and triggers that then you’re in the position for some further upside.

So a couple of opportunities you can look around the election. Again, trade very low risk. It’s going to be a very volatile election. There’s a lot more at stake or in place this election. We do have a global pandemic as well. So you’ve got a factor in that.

But USD/JPY could be an interesting chart to watch over the election period. Looking for some upside. Let’s see how the market reacts.

Thanks for watching. Any questions, comments below, and please drop you drop it below, and I will speak to you soon.

Practice your trading strategies before jumping into live trading. Open a free demo account with Blueberry Markets. Gain access to up to $50,000 for 30 days of practice trading. Prepare to trade in a volatile market on the US election day. Download the free Blueberry Markets Election Day trading guide to equip yourself with the right knowledge to make better trading decisions.


Blueberry Markets is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.