This is the first Market Update for the USD/JPY! Check out the recent "Update + The Way Forward" video for an explanation of what these are and why I'm doing them :)
Suffice to say, the USD/JPY is reaching a critical point that will likely define the market for the coming years. That's the longer-term view, but over the short term I'm expecting a swing back down of 300-400 pips over the next 1-2 months. Check out the video for reasons why. And remember that I won't be providing specific entry and exit points. I'll keep updating this idea as the market develops, but I won't be sharing my trades. Trust me, you're better off learning from this and applying it to your own trading style and strategy - it'll be to your benefit in the long run.
Let me know if you have any comments and feel free to PM me to discuss, well, pretty much anything!
Cheers and good luck,
The money flow is still showing a huge weakness on the Daily chart, and momentum divergence is still there as well.
So, for now, I'm waiting for a 110.00 break (but a solid break, look at what happened on the 14th June (e.g. on the H4). If it breaks that level the next resistance is 109, and after that 105-104.
Don't try and get in on this one too early. You're better off waiting for confirmation of any break rather than trying to pick a top/bottom. It reduces your profits, sure, but it is going to massively reduce your losses. And that's the name of the game.
So, if it breaks 110 the next support is 109, and after that 105-104.
If price breaches 110, then 109 is still the next level of support as that's when price last reversed from a downtrend. If that's breached then we hit the trendline at 108ish. That one could be really tricky as it's not a hugely strong trendline, but it's super old. So if it were me (and it will be) I'd get out around there and wait to see. If that trendline fails in a big way then there's no reason (from a technical perspective) that it won't hit 105-104.
There were lots of signs of the recent uptrend once price failed to properly breach the 110 level. Hopefully you still locked in profits if you traded this (trailing stops are great if set up correctly).
I'm still bearish on USD/JPY. The longer term patterns are in tact, and on the H4 short we're still looking at huge money flow and momentum divergences. If they hold, and so far they have, price will head south again.
Look for a short period of consolidation at the top of this price movement while larger investors reverse position. Given the lack of proper money flow in the market, I'd expect it to be a short one.
As always, wait for confirmation. There's no point shorting now while price is rising. Wait for a sign that price has reversed before entering. Use buy/sell limits to ensure you adhere to your strategy properly if you can't trust yourself to control your emotions :)