Things have been UNWINDING a little on the YEN!! Picking up on last week's final posts, we had been short for much of the anticipated down move and I had been expecting a possible range trade to develop. The short view was correct however the range trade view was WRONG to say the least.
So what now?
My bearish view obviously continues for now, but I am flat at this time and would like to watch price action. I will give a more detailed analysis for tommorrow's post if possible. Here is my general view based on the emotional state of today's market.
I would be very heistant to follow any short trades at this time. I am using 115.68 area as today's guide. A move back above this level would target 116.63 where we can look to set up shorts.
A further move down would target 114.73 where I would cover and look to set up shorts.
In both cases, use the static levels as targets and to control risk
Yesterday, I recommended an aggressive long trade out of the 115.68 level back to River at 116.51. This is exactly what happened and hopefully you booked 85 points or so on this trade.
River level is 116.86 today and this level will need to be resolved. A move out of this area should determine the next significant move in this pair so be alert and get set up with proper risk.
The monthly price distribution is out of balance on this pair and my bias is for continued USD strength in the short term. Please refer to the monthly PDA chart for reference on this.
So how do we trade?
Aggressive traders can set up shorts on a continued move into River at 116.86 with Risk just above this level as any significant intraday move through this level points to additional upside. Short targets are 115.68 and 114.73 where I would cover.
A move above and through River and I would establish longs with Risk under Zone -1 at 116.63. Ideally you would be able to establish longs on an intraday pullback to the 116.86 area. Upside targets are 117.99 and 118.57.
Hopefully, you were able to take yesterday's recommendation to set up shorts on a move into River at 116.86. The high was actually 116.89 and we have had a nice move down of almost 100 points as of this post.
I expect we will see some volatility on the ECB news out of Europe later today so stay nimble and execute your plan.
If you are short, stay short and use the River level at 116.68 to establish your risk limit. Short targets continue to be 115.68 and 114.73 where I would cover. You may want to take partial profits at 115.68.
As I mentioned yesterday, the monthly price distribution is out of balance on this pair and my bias is for USD strength to return in the short term. Please refer to the monthly PDA chart for reference on this.
BEARISH WHILE BELOW RIVER AT 116.68
The short trade from yesterday only made it to the first target at 115.68 Hopefully, you were able to take partial profits at 115.68. If not you should have covered near yesterday's River level at 116.68. If you re-read yesterday's post you will note that we have an out of balance situation on the Monthly Price Distribution and my bias was for USD strength in the short term.
Trade today moved us through the River Level at 117.05 and we settled above. Look to establish longs in front of Zone -1 at 116.63 and River 117.05. Risk should be beow 116.63. Targets remain at 117.99, 118.97 and 119.35.
A move below 116.63 and I would set up shorts for lower levels of 115.68, 115.26 and 114.73
