PaulWallace
Short

USDJPY Pre-Bernanke Wedge Setup

FX:USDJPY   U.S. Dollar/Japanese Yen
101 3 0
I like this wedge pattern that is forming on the yen. I will look to play a short position If we get a 5 minute close below 99 after Bernanke delivers his semi-annual policy report at 1230GMT. I won't necessarily play a break to the upside, but that is also possible!
Bernanke's report later tonight could be very market moving. There are three scenarios/outcomes to this event. These are, in order of likelihood:

1. He sticks to the "data dependant" stance and provides nothing really new - this shouldn't stir much volatility and I most likely won't take any trades.
2. He indicates that QE3 tapering will continue til 2014 and on - this will cause US dollar to fall, this could be a good AUDUSD buying opportunity and would also be a good USDJPY short opportunity.
3. He confirms that QE3 tapering will go ahead in September this year - this will cause equities like S&P500 and yen crosses to drop, US dollar will rise.

Keep your eyes peeled after this event.
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Unfortunately scenario 1 was the outcome for the event, so no trade was taken. There was some volatility but no clear direction. I will still be watching which way this wedge pattern breaks, as it is still in play.
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USDJPY Broke to the upside and since then price has come back down to 99.5. It looks like this is trading within a larger wedge pattern now, will post an updated chart later.
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