Here's an update on a few of the setups we’ve been tracking this week. For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy.

The Return of Yen Strength?

USD/JPY 120min Price Chart

USD/JPY Price Chart - 120min Timeframe

I’m’ on the lookout for a near-term exhaustion on this rebound in the USD/ JPY setup highlighted in yesterday’s Scalp Report. For now the focus is on fading strength into confluence slope resistance at the 108-handle. A downside break of this channel is needed to get things going with such a scenario eyeing initial targets at the median-line / 50% retracement at 107.73.

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AUD/NZD Price Tumbles Towards Support

Stay short AUD/NZD with price now approaching initial support targets at 1.0662 & 1.0626. Look for initial resistance at 1.0740s with bearish invalidation up at 1.0771. I highlighted this setup including the near-term trading levels in today’s AUD/NZD Scalp Report.

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Ripple Price Slide to be Bought

XRP/USD 240min Price Chart

XRP/USD Price Chart - 240min Timeframe

Last week I noted that, “the immediate advance looks a bit vulnerable here but the broader focus remains weighted to the topside while above the monthly / yearly low-day close. From a trading standpoint, I’ll favor fading weakness into structural support OR buying a break and retest of the median-line (1.2956) as support for a move back towards the 1.6177.” Ripple prices are breaking below confluence support at 1.0148 and the game-plan remains unchanged from my previous update. Look for initial support targets at 9003 backed by 8230 with bullish invalidation steady at 7600.

Ripple IG Client Positioning

Ripple IG Client Sentiment
  • A summary of IG Client Sentimentshows traders are net-long Ripple- the ratio stands at +21.01 (95.5% of traders are long) – bearishreading
  • Retail has remained net-longsince Dec 25th; price has moved 61.5% lower since then
  • Long positions are 4.4% lower than yesterday and 4.6% higher from last week
  • Short positions are 21.9% higher than yesterday and 2.5% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Ripple prices may continue to fall. Retail is less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed Ripple trading biasfrom a sentiment standpoint.

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-Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex or contact him at mboutros@dailyfx.com