USDJPY intra-day ranges and the monthly zone to watch out for

After taking a 100 pips loss from a pre-mature entry as price tested an established level, it seems like this next trade is on track. I still consider the 118.05 to 118.36 a fresh demand zone to watch out for in the future, but it looks like price won’t be hitting that level any time soon. As of right now, I have a few intra-day zones (potential supply levels) that I’m watching. Yes, monitoring possible reversal points is more crucial than ever as the monthly chart shows.

USDJPY Monthly
USDJPY Monthly

This is an untested supply level. The candlestick pattern that occurred in late 2006 is what Al Brooks refers to as a “price vacuum” where institutions attempt to get a better price by taking a position opposite to their true position. Haven’t been following too much on his books, but this is definitely zone worth watching especially as fractal counting produced lower highs. If you were to plot a trend line, this would definitely be a break out. However, a pull back is usually followed by a breakout as a wave of traders perform partial closes or close the position completely as a short term strategy. This pull back has not occurred yet so perhaps just waiting for the right moment?

Going down to the 1 Hour intraday time frame, got a trade in just slightly past 12 on January 6th. So far, it is looking good.

USDJPY Intraday
USDJPY Intraday

I have the fresh demand zone identified for future reference. Currently price sits at a resistance turned support, which I believe the support will hold. The next two zones above are definitely worth watching with the lower zone having a greater probability as a turning point as it has not been tested before. The upper zone is a more defined resistance level, which is arguable in terms of how many times it has been tested. I would argue three, but who knows? I still believe this resistance zone is significant as the first test resulted with a price fall down to 118.86. The third time down to 118.05 so no signs of weakening just yet.

Currently broke even and up slightly at 120 pips and still going. The next economic release isn’t until the NFP on Friday so until then there should be no unexpected surprised selling. A stop will probably be adjusted tighter for the pre-NFP release.

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