Transcript of Video
Hello everyone, this is today’s video analysis for November 1, 2018. Today we’re looking at the US Dollar versus the Japanese Yen [USDJPY] for today’s trade analysis.
Starting here on the daily timeframe, quite a long time this currency pair has been in an uptrend. If I zoom out a little bit, you could see how long that blue trend line, the rising blue trend line has been in place, going all the way back into February and March of 2018, this year, and it’s been moving higher. Something else we’ve talked about in the live Trade Room is the fact that it’s come down a couple of times now into the 100-period moving average.
Take a look at these little black circles here. Touching the moving average and rising, and then two times here together touching the moving average and rising. And if I zoom in a little bit, you could see in recent days we’ve also come back down and touched that 100-period moving average and started moving back up. So, very interesting. The 100-period moving average seems to be a pretty decent indicator of support here for the USDJPY.
Now we see the market in the past four days has a couple of things going on. Five days. You go back to the red candle and it dipped down to that moving average. Then, for the next two days, made a rise. A rally from 111.85 all the way back up here to 113.15 area into the low-113s, the orange-shaded area. In the past day, we’ve seen the market spike higher and now return back down into what we’re going to call today’s support, the yellow-shaded area here. 112.75, 112.55 is that yellow-shaded area.
And we could see today the low tapping into there as support. Orange zone acting as our resistance. 113.00, 113.15 is the orange zone. Something else we looked at yesterday. Fibonacci of the red trend line. I know I discounted this lowest low down here, but just Fibonacci of the red trend line here puts the .382 Fibonacci retracement level of the red trend right here at 112.75, which happens to be right at the top of that yellow-shaded area. So, we’ve now backed this up.
We have historical support and resistance around the yellow zone and now the .382 fib of the red trend line sitting above there for the day today. So, that is our support. 112.75. As long as it’s above there, difficult place to go short and sell. It doesn’t mean you can’t. It just means it’s a difficult place to sell on top of support. Otherwise, if the momentum is going to carry through that we’ve seen for the past three days, four days, we may see support here. Another challenge of the orange-shaded area. And of course a break of that orange-shaded area, we look for the continuation higher.
By the way, .618 of that red trend line sits right here at the green zone, 113.45 area, so that’s interesting as well. Holding support here. May see a break of the orange zone and head to the green zone or maybe even the blue zone way up here at the top of the chart, where the .786 and .886 fib are closer to that blue zone. Selling, again, difficult to do on top of that yellow-shaded area. Not only that. You see just a little ways back right here in the middle of the chart, the blue circle shows resistance. So, we know resistance, again, can help us identify support. Just a difficult place to go short on top of that yellow-shaded area.
We know of course over the next day, going even into tomorrow, we have significant news for the USD with non-farm payrolls coming up tomorrow, and we know that that can cause significant volatility. Over the past 24 hours, we’ve seen a little bit of a change in direction for the USD. It has sold off quite dramatically. If I go over here to the dollar index chart, you could see. Look at that. Dramatic change in direction.
It’s been moving higher for several weeks now and now just yesterday a dramatic turn of events. The question is: will this continue to pressure lower or will this just be a temporary pushback and we look for the return of the uptrend? I don’t think we can really say that for sure until we get through non-farm payrolls tomorrow. With this, it’s a little bit of caution selling USD or buying USD, but definitely something to consider.
Now, when we go over here to the JPY though, it’s interesting because we haven’t seen such a dramatic fall off. Sure, it came down, but it hasn’t been as dramatic as what we see over there in the USD index.
Let’s take it down to the four-hour timeframe. Again, we know even with that sell off yesterday, we found support here. So, if anything, if you’re going to go short, if you’re going to consider to go short, talk about the orange-shaded area, 113.00, 113.15. Your risk is of course it gets back above there. If you’re looking to go long, look at it here into the yellow-shaded area. I think we need a little bit more information. But at least for the time being, don’t sell on top of the yellow-shaded area for the USDJPY today.
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.