Want FULL ACCESS To
ROSS’ DAILY TRADE ROOM?
Simply Click The Get Started Button Right Now!
Transcript of Video
Click Here to receive an email alert when Ross posts a new daily video
I’m going to begin the day today on the US Dollar versus the Japanese Yen [USDJPY]. I’m going to start today on the Daily Chart zoomed way out so we can see further back into history. You go all the way back down to the bottom left-hand side of the chart, into October of 2012, where we started down there around the 77.50-level and we saw a climb over the next couple of years, as it pushed all the way to the highest high on the chart, near the 105.30-level.
Throughout the life of the trend, we’ve seen several times where the market went into short-term downtrends, periods of congestion, and periods of consolidation. I’ve placed a blue trend line here to represent the rising lows within the uptrend. And I’m not going all the way down to the lowest low, but I think significantly, if we start here, right about February of 2013, you can see the consistent nature of support found along this blue trend line. We see support, of course, at the first support where the trend line begins. We see support, support, support all the way up the blue trend line. And even in the most recent days, we’ve seen the market coming very close to that same blue trend line at the top right-hand side of the chart.
So, significantly along that blue trend line, we have seen support over the past couple of years for the USDJPY. Now let’s go ahead and zoom it in one time so we can see closer to the current market. And again, there’s that blue trend line coming up from the bottom, starting back in February of 2013. We can see, if you follow that blue-shaded area, the blue highlighted zone back, it goes between 100.95 and 101.20. That blue-shaded area. Follow it back in time. You could see support in the most recent days, but we go back here. We see support here, here, and here along that blue-shaded area.
I’ve also drawn in this red box containing the range that this pair has been in since going back to the left-hand side of that box. That left-hand side of that box starts back in January 20 of this year. So, since January 20, we’ve seen the market contained within a range, finding support into this blue-shaded area at the bottom, just about the 101-level, and resistance in several different places. I think there’s a couple of different resistance we want to take a look at.
First off, the pink-shaded area. You could see resistance here, back in January 28. You could see resistance here in early March, inside that pink-shaded area. That’s just into the 103.0-level. We do see the market. The last resistance high pushing all the way up here towards the 104-level at the top of the box into the purple-shaded area. At that same level, I’ve also drawn in a red trend line coming from the highest high on the chart into the mid-105s, connecting with our most recent highs. So, we see falling highs along the red trend line, rising lows along the blue trend line, and a range that has developed since late January between the blue and the purple-shaded area. Basically the blue trend line and the red trend line here for the USDJPY.
So, while we’re inside this range, we’ll continue to look for opportunities to trade inside the range. And as I’ve been discussing in the Trade Room over the past week or so, buying opportunities are towards the bottom of this range or this red box that we have, as close as possible to the blue zone. We could see, over the past few days, we’ve seen an opportunity to buy it very close to that blue-shaded area. Possibly even buying into the yellow-shaded area, targeting back to the green, pink, or purple-shaded area as our resistance. And the only thing that’s going to change that focus – change that perspective – is if it breaks that same area, breaks underneath that box, the blue trend line, the blue-shaded area. Then we look for it to continue to pressure down or change the overall trending pattern for this currency pair.
Now, as it goes back up, of course we’ll be capturing profit as it continues to work its way back towards the green, pink, or purple-shaded area. And at some point, at one of those three levels, we’ll likely find resistance. Well, our first resistance – the green-shaded area, 102.50 to 102.70. Follow it back in time. You see resistance here. You see resistance here. You see resistance here all along that green-shaded area. Then, just above that of course, we see the resistance here inside the pink-shaded area and all the way back here on the left-hand side. And then of course our last resistance at the high.
So, we have opportunities that present themselves within the range. Buying towards the bottom – best opportunities for that – or selling towards the top. Since we’re closer to the bottom, I think we’re closer to buying opportunities right now for the USDJPY rather than selling opportunities. Now, I know, over the past few days, the Forex Black Book trend bar at the very bottom has been red, which may give you a bearish bias, but it’s been going up. It’s been moving up, and that’s really good news.
If you’re looking to sell this, if you just looking within that red box there, here on the Daily Chart, where were the best opportunities to sell it? After it went up t the green zone, the pink zone, and the purple zone. So, those give you better opportunities. So, really what we want right now is for the market to go up – green zone, pink zone, or purple zone -, find resistance, give us a red arrow with the Forex Black Book on the 4-Hour Chart, and then give us a selling opportunity for this currency pair.
Let’s go ahead and go down to the 4-Hour Chart so we could see all those levels a little bit closer here on the 4-Hour Chart. Let me squeeze it in just a little bit. Let’s put our arrows in place where we would expect. Of course support or breakout into the blue-shaded area would be the bottom of the range. Currently, and significantly, we are finding support on top of this yellow zone, which is good news, especially if you hadn’t bought it down here underneath the yellow zone or within the yellow zone. We see that hook pattern that we’ve talked about many times in the Trade Room, where it breaks out above, hooks back down as support on top of that historical resistance as support. 101.90 finding support there. Now we’re looking for it to go back up.
As long as it stays above the yellow zone today, finds support there, we’re looking for challenges back higher. I don’t think right now is your best opportunity to sell it. I think your best opportunity to sell, if you’re looking for that, is back here to the green zone. Follow it back in time. You see resistance along that green zone back here on the left and the red arrows. The next resistance of course would be the pink-shaded area.
So let’s take Fibonacci here on this currency pair. From the highest high to the lowest current low that we see here just of this downtrend, we find the .382 at 102.37. That’s just at the highest peak high of our current resistance that we’re seeing. 50% sits at the top of the green-shaded area at 102.70, and the .618 sits all the way up here into 103.03, which is at the bottom of our pink zone. So, buy opportunities: dips to the yellow zone or possibly the blue zone. Selling opportunities don’t come until we reach all the way back to the green zone or pink zone. Those levels there – the green and pink – also become profit targets for the buyers from the yellow zone or blue zone for the USDJPY today.
