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USDJPY Highlights a Number of Trade Setups for Next Week

By , Sr. Technical Strategist
15 November 2013 21:29 GMT
  • USDJPY 98.90 serves as key pivot now; buying a dip
  • EURAUD and EURGBP trade setups
  • Monitor USDMXN and USDNOK for support at slightly lower levels

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USD/JPY

Hourly

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_10.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDJPY has broken above the trendline that extends off of the Jul and Sep highs. Price is nearing its Sep high of 100.60 and has not closed below the Oct high since 11/7.

-Even a break above the Sep high still faces headwinds at 100.97 (7/8 close) and 101.52 (Jul high). Of note is the fact that the Nikkei (USD) has already broken above its Jul high. Is USDJPY just lagging or is the Nikkei wrong? There is no way to know in advance. Just know that the USDJPY hasn’t confirmed the Nikkei’s strength just yet.

Trading Strategy: Order to go long at 99.90, stop 98.80. A breakout could be phenomenal so allow the market to dictate upside (if it plays out).

EUR/USD

Hourly

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_9.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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Italicized text is from last week

-EURUSD has broken the trend channel that defines action from the July low. My interpretation of this development is that the major trend has turned at least sideways, and maybe down (see last week’s writing on false EURUSD bullish breaks in recent years).

-Significant levels (the channel in the current situation) are sometimes re-tested from the opposite side of the market. The underside of the channel crosses about 1.3475 to 1.3510 next week.

-The previously uncovered 9/13 close was filled on Thursday and the EURUSD made an inside day on Friday. This combination is short term bullish.

Trading Strategy: After a week of choppy upside, the EURUSD finds itself at the right place to stop rallying but evidence is insufficient to warrant a position. A move through 1.3547 may be needed to rid the market of weak shorts before the next bear leg. Weakness below 1.3400 would pique my interest in the downside.

GBP/USD

Weekly

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_8.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-GBPUSD has spent 2 months trading sideways. Is the consolidation a pause in a bull trend from the Jul low or a topping process? I lean towards the latter given the presence of the multi-year trendline confluence impeding gains.

Trading Strategy: 1.6160-1.6207 is resistance. How the market trades up there (if it gets there) will determine tactics.

AUD/USD

4Hour

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_7.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-Bigger picture, the market broke from a symmetrical triangle the week that ended 5/17/2013. The Oct top is pips from that close level (with an outside day reversal on 10/23) and right at long term channel resistance.

-The advance from the August low is defined by converging lines (pennant, common in bear market advances).

-The market is probably consolidating before the next leg down. The first consolidation within the move from the Oct high took 4 days (11/1-11/6). Today was the 4th day of current consolidation.

Trading Strategy: “Currently short. Original stop was .9550. Stop has been lowered to .9475. The 9/13 uncovered close is at .9241 so target half at .9250.”

NZD/USD

4Hour

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_6.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The NZDUSD is one of the more compelling longer term bearish possibilities. Consider that…

-The decline from the April high unfolded in 5 waves (impulsive), the advance from the August low is defined by converging lines (pennant, common in bear market advances) and action since 9/18 may compose a head and shoulders top.

Trading Strategy: Nothing to do here…yet.

EUR/GBP

Weekly

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_5.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-EURGBP consolidation since the Feb top is similar in form to consolidation that began at the Dec 2008 high. Both series are corrective.

-Price action (inside day after the rate cut and sharp advance and now an inside week) during and after the ECB rate cut suggest that the drop into .8300 was one of capitulation.

-Near term, EURGBP is holding up at former resistance.

Trading Strategy: I am long. Stop is .8295. Target is .8500 (Aug low).

EUR/AUD

4Hour

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_4.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-EURAUD has followed through on last week’s reversal and is approaching the 9/27 high of 1.4559. Of interest in the future is the 8/30 uncovered close at 1.4841 and 8/28 close at 1.4918.

-Price has traded through the line that extends off of the Aug and Oct highs. The top side of the line is serving as support.

Trading Strategy: I am long. Stop is 1.4360. Target is 1.4550.

USD/ZAR

Daily

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_3.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDZAR spiked through channel resistance on 11/12 before making a key reversal. Since then, the rate has experienced its largest 3 day drop in 2 months.

-In general, this market has traded in a broad range since Jun. A significant topping is possible, especially now that the rate has created overlap with the Sep high.

Trading Strategy: The bulk of my short term trading has been in this rate. As always, the Twitter stream highlights activity. I do head into the weekend with a 10.23 stop on the remainder of a short position. 10.19 is estimated near term resistance.

USD/NOK

Daily

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_2.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDNOK broke above a 3 year trendline in June. The topside of that line was tested as support in September (the test was in the form of a spike on ‘no-taper’).

-Recently broken resistance at 6.0730 remains estimated support.

Trading Strategy: Looking for a low near 6.0730. If that fails, then this market might return to the downward sloping trendline (from above).

USD/MXN

Daily

USDJPY_Highlights_a_Number_of_Clean_Trade_Setups_for_Next_Week__body_Picture_1.png, USDJPY Highlights a Number of Trade Setups for Next Week

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDMXN continues to ‘triangulate’.

-There is possible support from 12.91 (10/31 low and trendline). Note the levels on the chart trendlines.

Trading Strategy: I’ll continue to track this rate for potential support and a low within the triangle. Eventually, a significant bullish break is possible (nearly 5 months of symmetrical triangle to this point).

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow him on Twitter @JamieSaettele

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15 November 2013 21:29 GMT