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Dark Cloud Cover Hampers USDJPY Outlook
Monday, 28 January 2008 23:04:53 GMT  |  Candlestick Warrior
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The US dollar is struggling to extend its gains against the Japanese Yen, leading everyone to wonder where it is headed next.  According to Traditional Candlestick study, the presence of a Dark Cloud Cover hampers the outlook for the currency pair.

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Do you think that the EUR/USD is headed higher according to Candlestick studies?  Discuss this on the DailyFX Forum

1/28/08             EUR/USD Daily Chart

 Trading Strategy

1.       Stay long (now 1.4775) with a stop below 1.46.  Lock in profits on half of the position at 1.4925 (1/14 and 1/15 high), move stop on rest to breakeven, targeting 3x risk at 1.53

 2.       Sell after a daily close below 1.4600 with 1.4700 stop.  Lock in profits on half of the position at 1.4500, move stop on rest to breakeven, targeting support at 1.4300.

 
Arguments for Further Strength

1.       Double Bottom?

2.       EUR/USD back above Shoulder Line

3.       MACD crossing into positive territory

 eurcandle_012808

 

1/28/08             GBP/USD Daily Chart

  GBP/USD Trading Strategy

1.       Short (now 1.9830) with a stop at 1.9925.  Lock in profits on half of the position at 1.9735, move stop on rest to breakeven, targeting 1.9545.

2.       Buy after a daily close above 1.9900 with a stop below 1.9800 stop.  Lock in profits on half of the position at 2.00, move stop on rest to breakeven, targeting 2.02.

Arguments for Fading Strength

1.       Deliberation on Daily Charts

2.       Doji on Daily Charts

 
Arguments for Further Strength

 1.       Ladder Bottom on Weekly Charts

 
GBP/USD Daily Chart

 gbpcandle_012808

1/28/08             USD/JPY Weekly Chart

 USD/JPY Trading Strategy

1.       Stay short (now 106.83) with a stop at 108.00.  Lock in profits on half of the position at 105.50, move stop on rest to breakeven, targeting 101.70.

2.       Buy after a daily close above 108.00 with a 106.00 stop.  Lock in profits on half of the position at 110.00, move stop on rest to breakeven, targeting 114.75.

 

Arguments for Further Weakness

1.       Dark Cloud Cover on Daily Charts

2.       Shooting Star on Daily Charts

3.       Prior Low of 107.22 Already Breached

4.       Inverse Hammer on Daily Charts as Well, Bottom Also Broken

 
Arguments for a Bottom

1.       Long Legged Doji

2.       MACD Turning Positive on Daily Charts

 

USD/JPY Weekly Chart

 jpycandle_012808

 

 

1/28/08             AUD/USD Daily Chart

AUD/USD Trading Strategy

 

1.       Stay long (now at 0.8880) with a stop at 0.8750.  Sell half of the position at 0.8950, move stop on rest to breakeven, targeting 0.9100

2.       Short on a close below 0.8700 with a stop above 0.8750.  Lock in profits on half of the position at 0.8650, move stop on rest to breakeven, targeting 0.8525

 
Arguments for Further Gains

1.       Three White Soldiers on Daily Chart

2.       Price Crossed Above 50 and 100-day SMA on daily Charts

3.       Daily MACD Flips Into Positive Territory

4.       Hammer on Weekly Charts

 

AUD/USD Daily Chart

 audcandle_012808

 

1/28/08             NZD/USD Weekly Chart

 

NZD/USD Trading Strategy

 1.       Stay long (now at 0.7772) with a stop at 0.7575.  Sell half of the position at 0.7900, move stop on rest to breakeven, targeting 0.8100

 2.       Short on a close below 0.7550 with at 0.7700.  Lock in profits on half of the position at 0.7400, move stop on rest to breakeven, targeting 0.7125

 

Arguments for Further Gains

 1.       Hammer on Weekly Charts

2.       Three White Soldiers on Daily Chart

3.       Price Crossed Above 50 and 100-day SMA on daily Charts

4.       Daily MACD Flips Into Positive Territory

 

NZD/USD Weekly Chart

Rounded Rectangular Callout: The NZD/USD has rallied strongly today. The three white soldiers formation hammer formation on the weekly chart suggest further gains. We also have MACD crossing into positive territory and the price of the NZD/USD rising above the 50 and 100-day SMA. There is no major resistance until 0.7935 but if trendline support at 0.7575 is broken, NZd bulls should be out. nzdcandle_012808

 

1/28/08             USD/CAD Daily Chart

 USD/CAD Trading Strategy

1.       Short on a break of 1.0013 (the triple bottom) with a stop at 1.0150.  Buy back half of the position at 0.9910, move stop on rest to breakeven target 0.9665

2.       Stay long (now at 1.0043) with a stop at 0.9965.  Sell half of the position at 1.0120, move stop on rest to breakeven, targeting 1.0255

 

Arguments for a Rebound

 1.       Three Line Strike on Weekly Charts

2.       Triple Bottom on Daily Charts

 

Arguments for Further Weakness

1.       Three Black Crows on Daily Chart

2.       MACD in Negative Territory

 cadcandle_012808


 

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