Transcript of Video
Hello everyone, this is today’s video analysis for January 21, 2019. Today we’re going to take a look at the US Dollar versus the Japanese Yen [USDJPY] for today’s trade analysis.
But first, it’s important for me to recognize of course the fact that today is a US bank holiday, so there could be limited movement today. Limited liquidity in the market because of the bank holiday. So, keep that in mind if you decide to place some trades today.
Looking here at the USDJPY daily timeframe, overall long-term we’ve been mostly in a downtrend. More bearish movement than bullish movement. Running from all the way up here at the top of the chart, 114.50s, all the way down to the flash crash we had a couple of weeks ago down to 104.65 or so. So, we had that long wick down there; market rapidly returning.
Since then, we’ve seen the market in somewhat of a period of congestion inside this black box, and then a rally as the market started moving higher and the USD improving against the JPY, pressuring back to the 109.70-level, the green-shaded area right smack in the middle of the chart.
Now, whether or not we can trust it or not, Fibonacci from the highest high that you see here at the top of the chart to the lowest low, which is the bottom of that flash crash wick down there into the 104.65-level. We have the 50 percent retracement level sitting of that long range sitting right around 109.60, which is right about where the current market price is under the green-shaded area.
Just something interesting. I don’t know if I can trust that with that long wick there, but there it is, sitting right there at 109.60. Obviously, Friday finding some resistance here. Today finding some resistance here. Again, keeping in mind the bank holiday, we may see limited market movement today, but holding resistance under the green zone means that the USD is going to have a difficult time pressuring through that level. And if the USD sells off again, falling off of there would be the expectation we would see.
Let’s take it on down to the four-hour timeframe. And incidentally, talking about Fibonacci again, we talked about can we trust that lowest wick with Fibonacci. Just to change it up a little bit, let’s put it to the bottom of the next candle, which is this candle right here. This little red candle. In doing that and discounting that long wick and putting it here at some more normalized price action, we now find the .382 Fibonacci retracement level living at 109.70.
Just an interesting observation. Again, tough to know how to trust Fibonacci. The long wick or here. Either way you look at it, long wick had 50 percent and the shorter level had .382 sitting at 109.60 to 109.70 as a Fibonacci retracement level. Well, 50 percent being the halfway level. Here it is right here into the green zone.
Let’s zoom it in a little bit here. There it is finding resistance into the 109.70, 109.90-level. Obviously this is resistance. So, for the day today, especially as long as we are in the US bank holiday, this is going to be our resistance. The chances of it breaking through here are more difficult than it would be for it to bounce off of here and go back down; head back down towards the yellow-shaded area.
The only real reason I think to buy USDJPY right now is that it gets through and above the green zone. There’s no real reason to buy this or go long until or unless it dips into support or breaks through this green-shaded area. I think really the only other option if you’re not buying is selling underneath the 109.70-level back down towards the yellow zone as your next support. So, no real reason to buy today under the green zone. Potential shorts if you’re going to trade short for the USDJPY today underneath the 109.70, 109.90-level, the green-shaded area 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.