Will the #USDJPY trend continue?
In this video, we break down a potential long opportunity from key support levels.
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we will take a little look at USD/JPY as the price is pulling back into the previous structure.
I want to be a buyer of the US Dollar. The US Dollar strength is quite apparent at the moment. We can see that across the board with many major currency pairs. Looks to me that the US Dollar is heading towards the 91.92 US Dollar area, which we’ve been looking at a while.
One currency that lacked strength is the JP Yen, and the US Dollar has been trading a lot higher since it went down ito these 103 areas, where we looked for longs throughout this whole period.
The price is now continuing that trend to the upside. We can see that we’re getting those higher highs and higher lows. But now, the price has pulled back into the previous structure highs here, which suggests to me that we could get another long opportunity back towards these highs, around the 106.12 area. 106.14 is where I’m looking to target for USD/JPY because the price is pulling back to this point.
If I take a look at the daily timeframe, we can see that we’re in that daily retracement phase. In the four-hour, we should expect to see a mini downtrend where we have this low point, here; the market then breaks to the downside.
What’s interesting about this is that the price is now starting to struggle around this area because of those previous supporting points.
What I like to do when the price gets down to this level – let’s go into the lower timeframe – I like to eye up an opportunity on a lower timeframe. It allows me to get in on the impulse move a little bit sooner or with a tighter stop-loss. I’d typically try and look for this when I’m trading these swing positions; if I go back down here when the USD/JPY came down into this major support level.
This zone is where I was expecting the USD/JPY to come and retest and find some support. Now, price came back into that point, allowing you to look at the four-hour timeframe. And say to yourself, if the four-hour timeframe starts finding some support in here, we can start looking for long opportunities.
We had this large candlestick come from the Bank of Japan saying that they’re looking to go further into negative rates. Look at what happened to JP Yen since they’ve decided to talk about things like that. We’ve seen the JP Yen devalue considerably, and this is typical of the Central Banks where they want to try and push the price or push the currency in a specific direction.
They’ll start making hints that they want the price to either hike interest rates or lower interest rates. They’ll start talking about inflation and things like that. That causes investors to start looking at the currency and see whether it is overvalued or undervalued. And in this case, we’re looking at this saying, “Well, the JP Yen could be overvalued.” So, we’ve seen the JP Yen sell-off because they’re looking to push the price into negative interest rates. Well, further into negative interest because the Bank of Japan is already in negative territory.
Now, prices pull back into this area, and it’s very similar to down here. If you’d watch the 30-minute timeframe at that point and watch for the break in trend, you can see that the market breaks out here and here, it breaks those highs, pulls back into the previous structure high here, and trends to the upside.
So, when you see the four-hour pullback in these situations, you’ll see the 30-minute downtrend as well, and when the trend changes, that’s when those longs start to come back in, here.
That’s what I’m looking for, here, if the price can break this current high or even double bottom, maybe even push a little bit further and change trend. That’s what I’m looking for to get a nice entry into USD/JPY with targets up at this 106.13 level.
Still. we need to wait for a while. We need to see how the market reacts to this area. We could still push a little bit further into this level, but I’m going to look for the breaking trend on the 30-minute timeframe for a potential long opportunity on USD/JPY.
I hope you enjoyed this video update. If you did, please give it a thumbs up. Comment down below on how you would trade this market. Speak to you soon.
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