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 December 6, 2017. Today we’re going to be taking a look at the US Dollar versus the Japanese Yen [USDJPY] for today’s trade analysis.
One thing that we want to take note of over the next couple of days is significant news that could affect this currency pair and all currency pairs that include the USD. Today at 8:15AM Eastern US time, we have ADP non-farm employment change. If it’s a significant deviation from the forecast of 189 thousand, we could see a significant move for the USD, positive or negative depending on how that plays out.
That being said, also going into Friday, our jobs news coming up out of the US. Earnings. Non-farm employment change and employment rate could, again, dramatically affect this currency pair, positive or negative. And then next week of course, over the next week, we have the potential for the raise of interest rates in the US. So, all of that has the opportunity or possibility of significantly affecting all US currency pairs and of course the USDJPY.
A couple of things to think about. We were in the uptrend. The blue trend line as the market was moving higher from the low down here into the 107s, all the way up into the high into the 114s. Then we saw a little bit of a pullback. Came back about halfway through that uptrend. We came about halfway back down here into 111.00, the orange-shaded area in the middle of the chart, and we’ve now made a little bit of a rebound.
During that fall, we created this red trend line and now we’re back above that red trend line. So, interesting scenario is if we get some positive motivation. Positive sentiment for the USD after our NFP or the ADP today or NFP on Friday or the interest rate news, we’ll likely look for the continuation higher for the USDJPY. If any of that is negative, a breakdown is a possibility. We are currently above the 100-period moving average as well.
So, some interesting area right here between the purple and blue zone. Let’s zoom it in on that a little bit. As we look back in time, we’ve seen the market between here before. We don’t have to look too far back. We could see right here the market bouncing between the purple and the blue-shaded area right here just the last time we were in this area on the way down inside the downtrend. Now we’re back in that area.
So, this is the area we want to focus our attention on. If we’re looking to go short, if we’re looking to sell the USDJPY for whatever reason, negative news, we would look for resistance at the purple zone, which it’s not there right now. A breakdown of the blue zone, which it hasn’t done yet. So, those are some the reasons we would look to go short. Maybe even it would need to break back under the red trend line and the 100-period moving average for us to have confidence for it to continue to go short.
Well, it’s not doing that today. So, if it’s not doing any of that today, and let’s zoom it in one more time, then the potential is we look for into support an opportunity. 112.20, 112.00 is the blue-shaded area, and this becomes an area where we may look for a long shot. A long opportunity. If we get positive motivation, again, from the blue zone, back to the purple zone. Above the purple zone, which it attempted a few days ago, couldn’t stay up there, 112.70, we look for the market to go higher. All of that above the red trend line, above the 100-period moving average.
Let’s take this older fib from the red trend line off. Let’s take that off so we have no Fibonacci on the chart. I just want to take a short fib from the low, the lowest low we have, to our most recent high. And interesting here is we find the .382 Fibonacci retracement level at 112.23. 50 percent just underneath the 112-level, 111.95 or so. And the .618 down here into the green-shaded area. So, that also, again, telling us that the purple, the blue, and the green zone with Fibonacci is still going to be very important for the day today.
Again, it all will likely hinge on what news we have. So, if it’s positive, we’re looking to buy the blue zone. Target the purple zone. Break the purple zone, target the orange zone or higher. If It’s negative, we may see another surge even down towards the 100-period moving average and this green-shaded area.
Four-hour timeframe not really going to change any of that. We did see of course the gapping from the weekend. The market went to the orange zone. Came down. Tried to fill it. Didn’t. Went back up a little bit. Now we’re settled down here in the blue zone. We’ve seen support here before. Again, not too hard to see. We’ll just take this little circle. We’ve seen support here before, and the it bounced back up to the purple zone.
So, these are the types of clues that we’re looking at. This is an area where the market has made a trading decision before, and that’s really what it’s about. You look back here, where the circle is. A trading decision of exiting sells, entering buys, driving it back to the purple zone. So, that’s what we’re looking for here. Blue zone. Green zone. We’re looking for support. Target the purple zone. Break the purple zone, go higher.
And all that would happen on positive US sentiment. Negative. The only real reason I think this is going to continue to go down would be the break of the green zone, the red trend line. We’ll target the orange zone or break of that, significantly moving lower for the USDJPY over the next several days. So, as long as it’s above that red trend line, my focus is looking for an opportunity to go long on 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.