In an overall choppy
market I will look for prior resistance levels (after a rally) for where the
bears will step in to take advantage of possible exhaustion. I’m sure plenty of
bears looked for the EUR/JPY to sink back through 102.00 (it couldn’t) and now
with 104.00 acting as near-term term resistance, bears will once again look for
the pair to sink lower through 103.50. I will explain which time frame to watch
now…
The EUR/JPY has continued to rally
higher - driven by yen weakness - for a second straight session. Since this
pair has not Directional Bias I continue to be hesitant to commit to trades on
time frames longer than 30-minutes. In fact the daily EUR/JPY is in such a chop
I will look for exhaustion between the 104.00 and 104.50 major psychological levels
which line up with past, pivotal highs at 103.98 and 104.58.
Past performance is not indicative of
future results
In
a wide, choppy market, I look for exhaustion since the lack of bullish or
bearish organization often leads to prices holding within the trading range
which is this pair is wide, further raising my expectations for a stall (and subsequent
reversal as prices sink back into the trading range).
The daily chart distribution fade set
up would be aggressive (as all distribution fades are) and the exhaustion area
is wide – over 50 pips – so an aggressive entry would trigger at 103.98 and an additional,
conservative entry would trigger up at 104.50. The point of validity (stop
loss) would be above the range high at 104.58 which puts it at 105.68.
In the current fiscal cliff/risk
averse/continued Greece and Spain concerned- environment I would expect more
euro weakness and yen strength however the recent political turmoil in Japan
has turned the yen-as-a-risk-barometer on its head.
Because of that I want to stay nimble
and that means at 30-minute chart or less. That brings me to the 15-minute
chart.
Past performance is not indicative of
future results
The
15-minute is (yet again) poised for a Wave Reversal where a break of the current
market trend could trigger a short sell. It’s important to notice that the
angle of the 34EMA Wave is at a “two to four o’clock” angle which is
transitional and the entry literally should look and feel like the market is “rolling
over”. If the Wave should flatten (as it did with the last Wave Reversal entry)
this strategy is no longer valid. Look for the CCI to plot below the -100 line
for confirmation of a break through the 34 period EMA low and 50 period SMA
close.
As an active forex trader and Chief Currency
Analyst for InterbankFX.com I do write for a number of sites all over the web
and I am happy to say that I will be posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my
trading account as well as intraday commentary.
Start
the discussion! Questions? Comments. Leave it here at the Daily Forex Trading
Edge for Raghee to personally answer. Using the icons at the top of the article
to forward this update to a friend via email, post it on Google or Facebook or
simply print it out for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
In an overall choppy market I will look for prior resistance levels (after a rally) for where the bears will step in to take advantage of possible exhaustion. I’m sure plenty of bears looked for the EUR/JPY to sink back through 102.00 (it couldn’t) and now with 104.00 acting as near-term term resistance, bears will once again look for the pair to sink lower through 103.50. I will explain which time frame to watch now…
The EUR/JPY has continued to rally higher - driven by yen weakness - for a second straight session. Since this pair has not Directional Bias I continue to be hesitant to commit to trades on time frames longer than 30-minutes. In fact the daily EUR/JPY is in such a chop I will look for exhaustion between the 104.00 and 104.50 major psychological levels which line up with past, pivotal highs at 103.98 and 104.58.
Past performance is not indicative of future results
In a wide, choppy market, I look for exhaustion since the lack of bullish or bearish organization often leads to prices holding within the trading range which is this pair is wide, further raising my expectations for a stall (and subsequent reversal as prices sink back into the trading range).
The daily chart distribution fade set up would be aggressive (as all distribution fades are) and the exhaustion area is wide – over 50 pips – so an aggressive entry would trigger at 103.98 and an additional, conservative entry would trigger up at 104.50. The point of validity (stop loss) would be above the range high at 104.58 which puts it at 105.68.
In the current fiscal cliff/risk averse/continued Greece and Spain concerned- environment I would expect more euro weakness and yen strength however the recent political turmoil in Japan has turned the yen-as-a-risk-barometer on its head.
Because of that I want to stay nimble and that means at 30-minute chart or less. That brings me to the 15-minute chart.
Past performance is not indicative of future results
The 15-minute is (yet again) poised for a Wave Reversal where a break of the current market trend could trigger a short sell. It’s important to notice that the angle of the 34EMA Wave is at a “two to four o’clock” angle which is transitional and the entry literally should look and feel like the market is “rolling over”. If the Wave should flatten (as it did with the last Wave Reversal entry) this strategy is no longer valid. Look for the CCI to plot below the -100 line for confirmation of a break through the 34 period EMA low and 50 period SMA close.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner