USDJPY - The USD correction seems to start finally
Chasing, chasing and chasing... that just makes us nervous. Trade when there is a better or more probable setup. And now there is one pointing towards a quick correction of this bullish trend.
Daily: Yesterday after briefly touching 110 handle, we had a big red candle with a close at the minimum of the day. Not a good signal after such a massive rally. Price also closed below Tenkan Sen.
MACD and Slow Stoch turned bearish together, this is also a strong bearish indication.
DMI lines converging and the extremely high ADX started to turn around, slowly decreasing.
4 Hrs: Chikou hits Price candles, Price is down to the Kumo and attacking the 100 WMA. Future Kumo flattened out, may give a bearish Senkou cross soon. Tenkan is about to cross Kijun (weak bearish cross). Key support is 108,50.
DMI is bearish now, ADX is picking up, this means we may see further selling pressure and profit taking from Bulls.
However I think we'll have one more spike before the next selling round. Slow Stoch is turning up from oversold, while as I meantionned Price is still at the Kumo. Most likely aroundd ECB decision time we will see one more spike to/above Tenkan and Kijun, that I would use to enter shorts. A breakdown at 108,50 will be clearly a sell signal, but of course the risk-reward would be a lot better at a higher entry point. I already sold some yesterday when Price crossed below Kijun Sen, I am looking to add more either on the retest or on the lower break.
p.s.: I've been thinking about how to trade a possible USD correction in time. Probably DXY and EURUSD is not the best, as the EUR can still remain under pressure, thus EURUSD will be less clear in direction and more choppy in trading. Anyway, the break point for a counter tred in EURUSD is a lot further than in USDJPY.
Daily: Yesterday after briefly touching 110 handle, we had a big red candle with a close at the minimum of the day. Not a good signal after such a massive rally. Price also closed below Tenkan Sen.
MACD and Slow Stoch turned bearish together, this is also a strong bearish indication.
DMI lines converging and the extremely high ADX started to turn around, slowly decreasing.
4 Hrs: Chikou hits Price candles, Price is down to the Kumo and attacking the 100 WMA. Future Kumo flattened out, may give a bearish Senkou cross soon. Tenkan is about to cross Kijun (weak bearish cross). Key support is 108,50.
DMI is bearish now, ADX is picking up, this means we may see further selling pressure and profit taking from Bulls.
However I think we'll have one more spike before the next selling round. Slow Stoch is turning up from oversold, while as I meantionned Price is still at the Kumo. Most likely aroundd ECB decision time we will see one more spike to/above Tenkan and Kijun, that I would use to enter shorts. A breakdown at 108,50 will be clearly a sell signal, but of course the risk-reward would be a lot better at a higher entry point. I already sold some yesterday when Price crossed below Kijun Sen, I am looking to add more either on the retest or on the lower break.
p.s.: I've been thinking about how to trade a possible USD correction in time. Probably DXY and EURUSD is not the best, as the EUR can still remain under pressure, thus EURUSD will be less clear in direction and more choppy in trading. Anyway, the break point for a counter tred in EURUSD is a lot further than in USDJPY.
