SO this is the second bearish trade set-up on USDJPY and the idea of this strategy is since the market has just broken major support structure and most times it usually comes back to re-test that structure which will now act as resistance, before continuing the bearish momentum. If you are gonna be taking this trade then there's 2 ways you can place your stops, the standard way is stops must go above previous structure however, that will only give you a r:r ratio of just 1:1 but you can also place your stops above the 61.8 fibonacci retracement level so whichever you are comfortable with. Personally, I wont be trading this pair using this strategy as I already have a potential bearish pattern also setting up on this pair as i mentioned in my previous post.
IF FED raises rates dec 16th, how can this pair (usdjpy) go down? History says dollar gets stronger with rise of rates. And eurusd would go down yet again, perhaps reaching the "parity" with dollar draghi so desperately wants. Eurusd has completed long term double bottom. By friday next week, where do you think we are with these two pairs. I see EURUSD RSI strengthening a lot here.
JoMarshall
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Thanks for the comment and i respect your fundamental point of view but technically speaking history says when the market breaks a support level it is 'likely' to continue it's bearish momentum. So me being a technical trader, i couldn't careless what the FED does and if they go ahead and raise rates on the 16th and the pair does go up like you said it would based on history then I will take a loss and move on and if an opportunity to go long arises technically then I will looking to buy but until then I will do what my chart says based on my technical analysis. In terms of the EURUSD, Like you said with the completion of the long term double bottom we have seen a little rebound last week and I expect that rebound to continue all the way to 1.1100 and even if we break that level to the upside I expect the recovery to be limited below 1.1750 because this market is as bearish as they come just looking at it on a higher time frame.