Transcript of Video
From Forex Traders Daily, this is your daily analysis with Ross Mullins, live from Richmond, Virginia.
Hello everyone, this is today’s video analysis for November 7, 2017. Today we’re going to be taking a look at the US Dollar versus the Japanese Yen [USDJPY] for today’s trade analysis.
We’re starting here on the daily timeframe. I’ve zoomed way out, so we could see the history for this currency pair. Everything to the right of the red vertical line on the left-hand side of the chart, inside the blue box, has been a large range for 2017, all year long. We could see multiple trends within the blue box or within the range. Five and now the sixth trend within the range. Top to bottom of that blue box that you see here on the chart.
We’ve most recently of course been in the rise or the uptrend here along the blue trend line on the right-hand side. And so, the question is two things can happen now, and history tells us there’s potential resistance and reversal to go back down. The second potential outcome here is that it breaks this pattern, breaks this range, pushes through the top of the blue box, and we see the continuation of the blue trend line or the uptrend.
So, those are the two potential outcomes that we’re watching for here for the USDJPY. Now, I don’t think there’s any indication yet that the trend is changing to go back down. I think we’re still well within the uptrend. The trend is intact. In fact, yesterday we even made a new high that we hadn’t seen in quite a long time, since the beginning of the year, and so the trend is still intact. And so, we want to focus on that direction, which is buying or the uptrend.
Let’s go ahead and zoom it in one time. There’s the blue trend line again. Again, the black box up here represents kind of a period of congestion, ranging, consolidation up here. While the market is hesitating within the uptrend, it isn’t turning into a downtrend quite yet. Again, yesterday we saw a new high made. You could see the spike high going above 114.50. The high of yesterday was 114.73. Again, back here, where the blue and the green circle are, we never saw it reach that high, so a new high within the uptrend.
So, we could see it continuing to pressure higher. So, if we’re looking to buy the uptrend, there’s really only two reasons we would buy anything. We either look for a dip to support, which as you could see for the past, and again this is the daily timeframe, five days. The past five days have found the yellow-shaded area as support, 113.70, 113.90. So, if you’re going to buy the USDJPY, looking for lower risk and higher reward, that area becomes the area that you want to focus your attention on. Buying close to 113.90, 113.70 gives you a better opportunity. Of course that would be closer to the blue trend line as well.
Second reason to buy or go long here on the USDJPY would be that it breaks the resistance barrier that you see here on the chart, which is 114.25, 114.50. It breaks that green barrier. Same five days are finding resistance there. So, if we’re looking to go long in the direction of the trend, those are the reasons to do it. It’s either at the yellow zone or above the green zone. Until that happens, it’s not really an opportunity that has lower risk and higher reward.
And does that mean you just instantly want to sell it? Well, of course obviously the past five days, if you would’ve gone short and sold at the green zone, 114.25, you’ve had an opportunity to see maybe 40, 50 pips back down to the yellow-shaded area, and that’s been a fine opportunity. Now, at some point in time, that area is going to change. We’re going to see it either break to the top of the green zone or we’re going to see the change of the trend, break of the blue trend line, yellow zone, and it’s going to go down.
Of course if it goes down, we already know that the orange zone becomes our first or next area of support on the way back down. And if I squeeze it in just a little bit, we could see the pink-shaded area, 115.00, becomes our next area of resistance. So, at least at this point, it may be more prudent to wait. The longer this stays inside this area between the green and yellow zone, it may be more prudent to wait for the breakout above the green zone or below the yellow zone. Not really fighting that battle in here.
Now, if you want to focus in the direction of the trend, of course that’s buying the yellow zone. Buy the yellow zone. Target the green zone. Target the pink zone. Obviously it’s not there right now. Four-hour timeframe. We come on down here to the four-hour. Let me squeeze it back out like this. And again, obviously over the past 24 hours, the best place to buy it would’ve been down here at the yellow-shaded area, targeting the green-shaded area. That’s already history, so we don’t want to think about that right now unless, again, it comes back down to the yellow zone. Targets the yellow zone, we buy it. We push through the green zone. We buy it. We look for it to continue into the 115s 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.