Transcript of Video
Hello everyone, this is today’s video analysis for October 8, 2018. Today we’re taking a look at the US Dollar versus the Japanese Yen [USDJPY] for today’s trade analysis.
First things first. Taking a look at the news calendar, bank holiday here in the US, so we definitely could see some limited market movement. Also a bank holiday in Canada, but potential limited market movement because of that so we want to pay attention to that. Use appropriate risk strategies of course in all cases. No matter if there’s a bank holiday or not, you should always be using appropriate risk strategies for your trading account.
That being said, let’s take a look here at the USDJPY. As we look at it here on the daily timeframe, I’ve zoomed out pretty far, so we could see some history all the way back to about a year ago. September, October of last year, the blue circle. Top left-hand side of the chart. By the way, we’re about in the same area we were one year ago, into this blue-shaded area at the top of the chart, 114.10, 114.40 is the blue zone.
But that area surrounding or just above the 114.00-level. Blue circle. Left-hand side. You could see the market found resistance there. Eventually, getting under the green zone. Beginning some reversal, heading on back down into 110-level, and then a little bit of a pullback and then an extreme change of the trend as it pushed all the way down into the 104s.
So, definitely an area that we want to pay attention to up here at the blue circle because we’re, again, in that same area. We’ve hit the blue zone. We’ve bounced off it. In fact, today, we now sit underneath the green-shaded area. That, again, back here on the left, signaled the potential reversal for the USDJPY. Of course a break of the blue zone would potential signal a continuation higher.
So, let’s just pay attention to where we are in the price levels for the USDJPY. Let’s move on in a little bit. Zoom in and you could see. Let’s go in one more time. The little black circle. Left-hand side of the chart. Historical resistance there. Resistance helps us identify future support. That’s right around 113.15, 113.00 into that orange-shaded area. So, we’re heading down there towards that historical resistance to act as support.
One other thing here that I’ve done is I’ve taken Fibonacci and gone from the bottom of the blue trend line. I didn’t go all the way to the lowest low. I went to the bottom of the blue trend line. The most recent leg of the trend to the current resistance high. That puts the .382 Fibonacci retracement level just underneath this orange zone. So, not only do we see the historical resistance, black circle back here, but we also now .382 Fibonacci retracement level of the blue trend sits there at the orange-shaded area.
By the way, .236 of that same trend sits here at the green-shaded area just underneath there. So, we now have identified using some Fibonacci and some historical support and resistance. The green zone is our current intraday resistance. Orange zone is our current intraday support. Of course the blue trend line. We’ve been following this trend for quite a long time in the live Trade Room. We’ve now seen the market now push underneath after several days of challenging the green zone as support, pushing underneath it and the blue trend line at the same time.
So, I would say under the blue trend line, under the green zone, and under the .236 fib of the blue trend, we are finding that as resistance for our day. The potential is staying underneath there continues to head towards the orange zone. Only if it gets back above the green zone do we look for the resumption of the uptrend.
Let’s go ahead and take it on down to the four-hour timeframe. And as we get down here, take a look at our current intraday movement. We saw some resistance here, some resistance here, and it’s been support into the green zone for the past few days. A little bit of a bounce higher. You could see it bounced from the green zone. Went up about 20 pips, and then came right back down, pushing back through the green-shaded area.
So, since market opened, we’ve seen it rise about 20 pips. 21 pips or so, and then pushing right back down through the green-shaded area. So, that’s very interesting for us here on the USDJPY. Again, I would say as long as it’s under the green zone, this becomes our resistance for the day today. Keeping in mind of course the bank holiday session that we’re trading during. The US trading session today. But that green zone will definitely become our resistance for the day today.
So, if you’re looking to go short and look for further reversal, the closer you can get there becomes your best opportunity. Your risk then is above the green zone. If you decide to go short at the green zone into resistance and underneath historical support, then your stop loss should be just above the green zone. Target the orange-shaded area on the way down if you decide to go short.
Buying it. Again, I think really can’t buy it right now unless it gets back above the green zone. That would probably be your very best opportunity to buy. Back above the green zone. Maybe down here at the orange zone. We’ll watch it for some support and reversal indications if it reaches there today, but potentially buying the orange zone if support develops there. Potentially buying above the green zone. But for the day today, I think selling under the green zone may be our best opportunity. 113.60, 113.75 becomes the best opportunity today for the USDJPY.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.