I like the short side of USDJPY. Here's why...
Quarterly: I typically pay little attention to this timeframe in this fast moving market. but I think its worth noting we haven't had a down quarter in a year and the risk of betting on the top of the range and the trend line breakout are the same now.
Monthly: Tweezer top candlestick pattern, two attempts failed to break out of implied range and close with any meaningful strength.
Weekly: Look closely, for over a month the market couldn't close above 114 then we had a 2 candle pattern touch 115 and find sellers now we broke down below the previous range, tight as it may have been, and now we have a clean pullback to go short on.
Daily: That big momentum down day on the 26th is my signal to get short, the market pulled back and is breaking out of that complex pullback to the short side.
The risk on this trade entry on the Daily is at the top of the implied range. I think a stop above Thursday and Fridays high is too tight, personally I'll stay small and give myself that 100 pips because major support on the weekly is down at 111, giving me around a 1:3 rr. might even start the trade at 115.50 stop and give myself 150 pips to swing; thats the widest stop and I like my odds of this going short, I'd hate to get stopped too tight, thats the money in my sleep play. if I was going to be at my desk all day I would enter on lower timeframes with tighter stops and take small losses while waiting for another big down day.
Fundamentally I wanted to add that it would be unwise to assume because rates are set to rise in the coming months that the dollar must rise, thats a one dimensional perspective, inflation and rate hikes have been priced in for months, arguably a year.
Thank you for reading, Ive got about 10 years experience with technical analysis and I try to be as objective as possible. If you like my work smash that follow button. Peace and profits.
Monthly: Tweezer top candlestick pattern, two attempts failed to break out of implied range and close with any meaningful strength.
Weekly: Look closely, for over a month the market couldn't close above 114 then we had a 2 candle pattern touch 115 and find sellers now we broke down below the previous range, tight as it may have been, and now we have a clean pullback to go short on.
Daily: That big momentum down day on the 26th is my signal to get short, the market pulled back and is breaking out of that complex pullback to the short side.
The risk on this trade entry on the Daily is at the top of the implied range. I think a stop above Thursday and Fridays high is too tight, personally I'll stay small and give myself that 100 pips because major support on the weekly is down at 111, giving me around a 1:3 rr. might even start the trade at 115.50 stop and give myself 150 pips to swing; thats the widest stop and I like my odds of this going short, I'd hate to get stopped too tight, thats the money in my sleep play. if I was going to be at my desk all day I would enter on lower timeframes with tighter stops and take small losses while waiting for another big down day.
Fundamentally I wanted to add that it would be unwise to assume because rates are set to rise in the coming months that the dollar must rise, thats a one dimensional perspective, inflation and rate hikes have been priced in for months, arguably a year.
Thank you for reading, Ive got about 10 years experience with technical analysis and I try to be as objective as possible. If you like my work smash that follow button. Peace and profits.