Forex Overnight Preview: Trading Plans For The USD/JPY

From an active trader’s perspective, the last 24 hours have been productive. Plenty of economic data reports have fueled participation and volatility creating desirable trading conditions. As we move into the late U.S. session and overnight periods, there are several events worthy of note:

Country                                     Event

United States                            API Weekly Crude Oil Stocks

Australia                                    Westpac Consumer Confidence (Nov.)

Japan                                        Gross Domestic Product

Eurozone                                   CPI, Trade Balance

United Kingdom                        Average Earnings, Unemployment

United States                            CPI, Retail Sales

The headliner will be the United States CPI statistic release tomorrow at 10:30 AM EST. Remember that the U.S. Federal Reserve is scheduled to meet again in a few weeks. Any data that supports inflation growth will further raise the chances of an interest rate hike for the USD.

USD/JPY Technical Outlook

Currently, there is an open long trade in the USD/JPY over on the signals page. This pair is likely to experience some added heat over the next 18 hours with key economic events scheduled for both Japan and the U.S.

USD/JPY, Daily Chart

On the daily timeframe, the USD/JPY continues to trade in the vicinity of the late October post snap-election gap. The market has rejected the area above the May/July double top, electing to test downside support areas on the daily timeframe.

Overview: For now, the USD/JPY is in a holding pattern in anticipation of the coming news cycle. Price is trading in a robust support zone including the Daily SMA, 20 Day EMA, and Bollinger Midpoint. This area is a possible bottom for today’s range.

If we see a dramatic market move to the bull, I will be shorting 114.49 with an initial stop at 114.76. In the event that tomorrow’s U.S. CPI creates enough action to drive price north to entry, a 1:1 or 2:1 R/R scenario will produce 25 to 55 pips.

As always, trade smart and for tomorrow!