U.S. Cash Open Brief: Gameplan For The USD/JPY - Forex News by FX Leaders

U.S. Cash Open Brief: Gameplan For The USD/JPY

Posted Tuesday, October 24, 2017 by
Shain Vernier • 2 min read

Every now and then fundamentals and technicals collide to give us an outstanding trading opportunity. Monday’s recommendation for the USD/JPY was one of those scenarios. In the wake of Shinzo Abe and LDP winning a landslide victory in the Japanese snap election, the USD/JPY opened gap up creating a great opportunity to get long.

Kudos to everyone who took the 50+ pips from the USD/JPY gap. If you are still in this trade, be sure to adhere to a solid management plan to preserve gains.

Currently, the USD/JPY is still very active. Let’s dig into the technicals and see if we can find another trade or two.

 

USD/JPY Technical Outlook

This week’s opening gap has been filled in, and the yen has continued fading against the dollar.

USD/JPYUSD/JPY, Daily Chart

 

A few observations facing this market:

  • Japan’s economic calendar is fairly clear until Wednesday, with the Ministry of Finance releases. As the market digests the impact of Sunday’s election results, no news is good news.

  • October’s high of 113.43 has repeatedly brought buyers to the market, a strong signal that the bulls are in complete control.

  • Monday’s price action above 114.00 did not take hold. Today’s high of 113.96 serves as a proximity test of 114.00 and Monday’s high of 114.09. With two tests of this area, a third is likely to give us a run to the May/July Double top at 114.36-114.49.

Overview: Today’s closing range may provide a position trade going into the midweek sessions. For now, I am on the sidelines, looking for further compression and a run at topside resistance.

In the event that the bulls drive the USD/JPY higher today, I will be selling 114.36 with a stop above 114.55. Profit targets will be modest as holding position shorts in this market is not a good idea.

As always, trade smart and watch the risk management!

 
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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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