U.S. CPI Is In-Trading Plan For The USD/JPY

This morning has been an active one for the USD, with several key economic metrics being released. U.S. CPI came in at 2.0% meeting expectations, and Retail Sales (Oct.) measured 0.2%, outperforming projections. The result has been lagging performance by the USD for the session, but a trend that appears to be losing steam.

In the event that the USD shows some resilience, we may have a nice short entry facing the USD/JPY.

USD/JPY Technicals

Tuesday’s late session reversal has driven the USD/JPY beneath key support levels, prompting reevaluation.

USD/JPY, Daily Chart

The news cycle of the last 18 hours has stimulated the markets. For the USD/JPY, intraday timeframes are posting retracements off of daily lows. If this continues, several key resistance levels will be in play:

• Resistance(1): Bollinger MP, 113.30

• Resistance(2): 20 Day EMA, 113.40

• Resistance(3): Daily SMA, 113.52

Bottom Line: With such a bearish formation on the daily chart, I am inclined to short areas of resistance. A sell from 113.24 with an initial stop above 113.52 is a solid way to capitalize on the price action. The trade management is flexible, allowing for a 1:1 or 1:2 R/R payoff of 28 or 56 pips.

If this trade is elected during the U.S. session, check back for tips on how to actively manage the open position.

ABOUT THE AUTHOR See More

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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