PaulWallace
Short

USDJPY Pre-Bernanke Wedge Setup

FX:USDJPY   U.S. Dollar/Japanese Yen
102 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!
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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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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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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