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Yen Gets Smoked on ISM - HUGE Technical Implications

Yen Gets Smoked on ISM - HUGE Technical Implications

Jamie Saettele, CMT, Sr. Technical Strategist

FXCM Expo Videos

Innovative Techniques with Traditional Technical Indicators

Trading with the Elliott Wave Principle

Seeing the Forest from the Trees: An Analysis of Global Markets

Afternoon Technicals (all charts)

Other TA (crosses, COT, etc.)

Traders are buzzing about the surprise 50 bps cut by the RBA (market expected 25). The immediate AUD reaction was sharp but the AUDUSD remains confined to a 10225-10475 range. From a trading standpoint, the advent of a new month is just as important as the 50 bps cut. Using early month ranges as points of reference from which to establish trades is a method that I’ve taught in seminars for years. Opening monthly range breakout strategies are shown below for the EURUSD and AUDUSD. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

The strategy on AUDUSD has worked so well in recent years that it may be due for a drawdown. Keep that in mind. The EURUSD is in a range that I want no part of. The Yen crosses, specifically the USDJPY and CADJPY, have my attention. Think North America vs. Japan, Hockey (it is the playoffs) against Sumo wrestling.

Yen_Gets_Smoked_on_ISM_-_HUGE_Technical_Implications___body_Picture_4.png, Yen Gets Smoked on ISM - HUGE Technical Implications

Prepared by Jamie Saettele, CMT

Yen_Gets_Smoked_on_ISM_-_HUGE_Technical_Implications___body_Picture_3.png, Yen Gets Smoked on ISM - HUGE Technical Implications

Prepared by Jamie Saettele, CMT

Yen_Gets_Smoked_on_ISM_-_HUGE_Technical_Implications___body_usdjpy.png, Yen Gets Smoked on ISM - HUGE Technical Implications

USDJPY – Barring a full retracement of the post ISM surge, the USDJPY is going to carve out a daily key reversal on the first day of the month in front of MAJOR support (October intervention high at 7953). This is the kind of setup I dream about.

Yen_Gets_Smoked_on_ISM_-_HUGE_Technical_Implications___body_usdcad.png, Yen Gets Smoked on ISM - HUGE Technical Implications

USDCAD – The bounce off of 9800 offers the opportunity to get short for the larger breakdown. Combine the USDCAD and USDJPY and you get a super bullish CADJPY.

To contact Jamie e-mail Follow me on Twitter @JamieSaettele

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Jamie is the author of Sentiment in the Forex Market.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.