News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Markets Week Ahead: Gold, Dow, Pound-Dollar, BoE Rate Decision, Fed Risk, PMIs Check out my recap of last week and preview of upcoming event risk, plus all the latest forecasts from the @DailyFX team below. Link to Analysis - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/06/20/Markets-Week-Ahead-Gold-Dow-Pound-Dollar-BoE-Rate-Decision-Fed-Risk-PMIs.html $GLD $DJI $GBPUSD #Trading
  • Traders focus a lot of their energy on spotting the perfect time to enter a trade. While this is important, it is ultimately where traders choose to exit trades that will determine success. Learn about the three types of trading exit strategies here: https://t.co/muYkTNXH7s https://t.co/hbZPJmoOHe
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/C0i7u1dDKL
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/Q69HKBXeKH
  • (Weekly Technical Outlook) US Dollar Outlook, Key Trend Reversals Playing Out? USD/CAD, AUD/USD, EUR/USD, GBP/USD #USD $USDCAD $AUDUSD $EURUSD $GBPUSD https://www.dailyfx.com/forex/technical/article/special_report/2021/06/20/US-Dollar-Outlook-Key-Trend-Reversals-Playing-Out-USDCAD-AUDUSD-EURUSD-GBPUSD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/7C56bfljV4
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/Gea69MhO04
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/oPaSJLahbE
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/bFOK9RRXtv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/LIumDnHrTo
  • Rollover is the interest paid or earned for holding a currency spot position overnight. Learn how to earn rollover interest on your open positions here: https://t.co/SRsG8CxjEn https://t.co/ITdDUGoAL0
Long USD/JPY Trade That's Ideally Validated

Long USD/JPY Trade That's Ideally Validated

Todd Gordon, Technical Strategist

Talking Points:

  • Bonds: The Most Valuable USD/JPY Catalysts
  • Elliott Wave Analysis Supports the Long Side
  • Step-by-Step Parameters for Taking This Trade

When it comes to trading USDJPY, it’s actually more important to follow US bond markets and their corresponding yields than it is to watch the general direction of the US dollar (USD).

US bond yields have a major impact on the direction of US interest rates, and interest rates have a major impact on the direction of the US dollar against the Japanese yen (JPY). The proof can be seen on the chart below, which shows the strong correlation between US 30-year bond yields and the USDJPY spot rate.

Guest Commentary: Strong Correlation Between US Treasuries, USD/JPY

Long_USDJPY_Trade_Thats_Ideally_Validated_body_GuestCommentary_ToddGordon_January17B_1.png, Long USD/JPY Trade That's Ideally Validated

Now that we understand the correlation between US bond yields and USDJPY, we should only move into USDJPY positions when there is confirmation of a similar set-up in the bond market, and it just so happens that one of our favorite set-ups for the week ahead is a long USDJPY trade that has sound confirmation from higher US bond yields.

Why Long USD/JPY Is in Play Next Week

Not to be confusing, but in the chart below, we have switched over to view the price (not the yield) of 30-year US bond futures. The reason for this is because the futures market trades 23 hours per day on the CME GLOBEX market, while bond yields are only calculated and charted approximately six hours per day. Therefore, when trading a 24-hour market like forex, it’s beneficial to track a correlated market with similar trading hours.

In the 30-year bond market, Elliott Wave analysis projects a small rally into 132.00 next week before a sizable decline targeting 130.00 ensues. If the bond rally fails next week, you now know the corresponding yield should move higher, and those rallying bond yields will help USDJPY move higher.

Guest Commentary: Long USD/JPY Trade with Confirmation from Bonds

Long_USDJPY_Trade_Thats_Ideally_Validated_body_GuestCommentary_ToddGordon_January17B_2.png, Long USD/JPY Trade That's Ideally Validated

The USDJPY Elliott wave position identifies support between 104.00 and 103.00, which is setting up a rally towards 106.00.

The trade for next week is as follows:

  • Trade Entry: Buy USDJPY at 104.00
  • Stop Loss: Place stop at 103.00
  • Initial Target: 106.00
  • Intermarket Analysis: Be sure to confirm US bond yields are indeed rallying before trading

Also, watch the corresponding video, “Bonds: The Most Valuable USD/JPY Catalysts.

By Todd Gordon, founder, TradingAnalysis.com

Receive three free months of premium trade signals and analysis by visiting TradingAnalysis.com.

Disclaimer: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors.

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

DISCLOSURES