~ Week Of June 20th 2016 ~
Playing The Yen One Of Two Ways
Published by Jay - June 18th 2016
The USDJPY has been in a downtrend for quite a few months now, and recently broke through a key area on the daily time frame. Looking at the zoomed out daily chart below, we can see a level that price respected on multiple occasions since January 2014.
The market has now broken through this key area, and ended the week by producing what is known as an "inside bar" at the New York trading session close.
We can play this pair one of two ways. The fact that the breakout candle did not close strongly, as shown by its relatively large lower wick, may suggest that we will see price retrace back to the key level in the new trading week. If this occurs, we can keep our eyes open for a trade entry signal to sell around that level in line with the recent downward momentum.
On the other hand, if the market simply continues to fall past the low of the breakout candle, far enough to give us entry confirmation, this too may provide an opportunity to bank some profits on a short trade.