Learn Forex: Entering After a Strong Yen Move

RELATED QUOTES

SymbolPriceChange
EURJPY=X114.0870+0.119
GBPJPY=X133.6310+0.076

Article Summary: The Japanese Yen is arguably the weakest currency for the past couple of weeks. Use forex technical analysis to find higher probability zones to enter into the direction of the trend. Those prices zones currently rest near the monthly pivot levels.

When looking at my heat map of the trends sinceDecember 26, 2012, the Japanese Yen is obviously one of the weakest currencies. Today, we will look at how to enter into trades of this strong trend.

Learn_Forex_Entering_After_a_Strong_Yen_Move_body_Picture_6.png, Learn Forex: Entering After a Strong Yen Move

The currency pairs specifically highlighted in this piece will be the EURJPY, GBPJPY, and AUDJPY because they are the top 3 movers over the past week and a half. As you can see above, they have moved 600-700 pips since the day after Christmas. Moves like the above do occur with some regularlity in foreign exchange. Therefore, it is important to learn patience in seeking out a higher probability trades. That patience can be created by identifying higher probability support zones then wait for prices to move into your zone.

When mapping out the current waves and potential resistance areas, the first thing I notice is how prices are extremely extended. This gives me clues about a couple of things:

Clue #1: I don’t want to buy now because prices are extended and due to consolidate.

Clue #2: I don’t want to sell now because the trend is obviously up and I want to align my trades in the direction of the overall trend.

Therefore, look for a consolidation of prices or a pull back to let the trend breathe. You see, a trend is like a sprinter. You can sprint long distances forever. The runner needs to take a break before sprinting again. The Japanese Yen is much like the sprinter and is due for a breather. That doesn’t mean it will pull back, but as mentioned above, we are at a point in the trend when the risks are elevated to buy or sell. That means we wait for prices to pull back before entering in the direction of the trend.

Forex Analysis: EURJPY Support at 111.50

Learn_Forex_Entering_After_a_Strong_Yen_Move_body_Picture_3.png, Learn Forex: Entering After a Strong Yen Move

(Created using FXCM’s Marketscope 2.0 charts)

As we can see above, the most compelling level of support is the monthly pivot near 111.50. This also happens to be the same location as the previous swing highs on October 2011 and March 2012. We know from support and resistance training that what was resistance when broken acts like new support. So when seeking out buying opportunities, we can use technical analysis to identify 111.50 as a strong support level and a high probability entry zone if reached. (For scalpers, consider the weekly Scalping Trend report – Scalping Short Term Forex Momentum )

Forex Analysis: GBPJPY Support at 138.00

Learn_Forex_Entering_After_a_Strong_Yen_Move_body_Picture_4.png, Learn Forex: Entering After a Strong Yen Move

(Created using FXCM’s Marketscope 2.0 charts)

The GBPJPY has a similar level of support below the current price. Again, when adding the monthly pivot levels to the chart, current prices are pushing up against the R1 level suggesting some type of reaction is probable to the downside. However, the trend is up so it would be counter trend to sell at current levels. Counter trend trades are riskier. That means we want to look for a consolidation and enter after the consolidation in the direction of the trend which is up.

Additionally, when applying the Marketscope Fibonacci Expansion tool, it a lays a 2.618 level near the monthly pivot at 138.00. You can see how price paused on December 19, 2012 before continuing it move higher. Therefore, if price does consolidate back towards 138.00, this could be a level of support to consider a long entry on.

Forex Analysis: AUDJPY Support at 88.00

Learn_Forex_Entering_After_a_Strong_Yen_Move_body_Picture_5.png, Learn Forex: Entering After a Strong Yen Move

(Created using FXCM’s Marketscope 2.0 charts)

The AUDJPY shows a similar pattern as the GBPJPY. The monthly pivot rests near 88.00. When applying the Marketscope Fibonacci Expansion tool, notice how prices are currently on top of the 1.618 extension level near 93.85. That suggests prices are likely to pause if not consolidate a little. As mentioned above, prices are too high to buy, so we’ll look for lower levels to enter long.

It is also interesting how the 1.000 Fibonacci expansion level is near the monthly pivot point. This indicates strong support at 88 and a good zone for a higher probability long entry.

Bottom line, the strong trend in the JPY cross pairs to the upside has created an extended move that is risky to enter at current levels. It is risky because prices may consolidate sideways or lower. Since this strong trend is up, we don’t want to sell either because that would be trading against the trend. Therefore, the higher probability entry zone for a long entry is near the respective monthly pivot point.

Good luck with your trading!

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX Education

Follow me on Twitter at @JWagnerFXTrader.To be added to Jeremy’s e-mail distribution list, click HERE and enter in your email information.

Want to learn more about interpreting price action? Register to take our free 20 minute course on Price Action Trading.

Register HERE to participate.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Asia markets track Wall St up, US jobs in focus
    Asia markets track Wall St up, US jobs in focus AFP News - 18 minutes ago

    Asian markets rose on Tuesday, with Tokyo recovering from initial losses as expectations of a US interest rate hike and talk of more Japanese monetary easing pushed the yen down against the dollar. Bets on a rate hike this year have soared after … More »

  • Exclusive: Six U.S. senators urge Obama to prioritize cyber crime at G20 summit
    Exclusive: Six U.S. senators urge Obama to prioritize cyber crime at G20 summit Reuters - 26 minutes ago

    Six U.S. senators have urged President Barack Obama to prioritize cyber crime at this weekend's Group of 20 summit in China, in the wake of the theft of $81 million from Bangladesh's central bank, according to a letter obtained by Reuters. The … More »

  • Why you should ignore Federal Reserve noise
    Why you should ignore Federal Reserve noise Truewealth Publishing - 30 minutes ago

    Over this past weekend, a group of old people met at a remote mountain resort in the middle of nowhere in the U.S. and talked about money. And judging from the way the financial media treated the event, it may well have been the Greek mythological … More »

  • Tokyo shares flat by break, soft data offsets weak yen AFP - 31 minutes ago

    Tokyo shares ended the morning session flat on Tuesday as tepid data and profit-taking from the previous day's rally offset a weaker yen and a rally on Wall Street The benchmark Nikkei 225 index ticked ... … More »

  • Gold holds overnight gains; U.S. data back in focus Reuters - 52 minutes ago

    Gold held steady early on Tuesday as bargain hunters swooped in after the metal fell to near five-week lows, while investors wait to see how U.S. nonfarm payroll data due later this week will play into the timing of any rate hike. * Spot gold was … More »

  • Oil down 1 percent, pressured by glut, dollar, Nigeria outlook
    Oil down 1 percent, pressured by glut, dollar, Nigeria outlook Reuters - 1 hour 1 minute ago

    Oil prices settled down more than 1 percent on Monday, snapping two consecutive days of gains, on renewed concerns about an oil glut, a stronger dollar and expectations that Nigerian rebels will stop hampering that country's crude output. … More »

  • Wynn’s $4.2 Billion Macau Casino Is Seen Off to Slow Start (1) Bloomberg - 1 hour 8 minutes ago

    The part of the casino floor catering to mass market customers at the Wynn Palace “felt slow” relative to other recent openings, Union Gaming analyst Grant Govertsen said in a research note Monday. The new casino has led to a marginal increase in … More »

  • Yuan Bears Emerge From Hibernation as Fed Imperils G-20 Calm (2) Bloomberg - 1 hour 15 minutes ago

    Derivative markets are pointing to renewed bets on yuan depreciation, with a three-month measure of expected price swings poised for the biggest monthly increase since January. The increased pessimism comes after a period of calm that sent the … More »

  • Oil prices rise as dollar retreats from two-week high Reuters - 1 hour 20 minutes ago

    Oil futures edged up on Tuesday as the U.S. dollar erased earlier gains, but doubts that producers would be able to agree to an output freeze continued to drag on prices. International Brent crude oil futures (LCOc1) were trading at $49.34 per … More »

  • Volkswagen decides not to sue South Korea over sales ban
    Volkswagen decides not to sue South Korea over sales ban Reuters - 1 hour 41 minutes ago

    Volkswagen (VOWG_p.DE) decided against suing South Korea which last month suspended sales of most of its models and slapped a fine of 17.8 billion won (12.16 million pounds)on the German carmaker. Instead, Volkswagen will try to achieve … More »

  • China’s Credit Party Winds Down in Headwind for GDP Growth (1) Bloomberg - 1 hour 44 minutes ago

    The amount of local yuan bond sales minus maturities fell 39 percent in August from a year earlier for non-financial firms to 124 billion yuan ($18.6 billion), data compiled by Bloomberg show. China must balance cutting corporate debt, which more … More »

  • BOJ Needs Massive Shock & Awe, $2 Trillion Investor Says (1) Bloomberg - 1 hour 53 minutes ago

    “It is how much they do, and whether they can create that kind of shock and awe at this point in the cycle,” said Mark Haefele, global chief investment officer at UBS Wealth Management, in a Bloomberg Television interview, on Monday. “They could … More »

  • 5 Unheard Of Beach Destinations In Australia
    5 Unheard Of Beach Destinations In Australia GET.com - 2 hours 11 minutes ago

    Many of us Singaporeans dream of visiting the land down under, which is surrounded by the ocean and... … More »

  • Japan’s Household Spending and Unemployment Fall in July (1) Bloomberg - 2 hours 37 minutes ago

    Household spending fell 0.5 percent in July from a year earlier, the statistics bureau said on Tuesday (forecast -1.5 percent). Retail sales fell 0.2 percent from a year earlier (forecast -0.9 percent), according to a trade ministry report. The … More »

  • Asian Stocks Gain Amid U.S. Rebound While Japan Shares Retreat Bloomberg - 2 hours 49 minutes ago

    The MSCI Asia Pacific Index climbed 0.3 percent to 138.33 as of 9:16 a.m. in Tokyo. The index fell Monday after Federal Reserve Chair Janet Yellen indicated the case for an interest-rate hike is getting stronger. Investors are watching data … More »

  • Asia ex-Japan Stocks Advance After U.S. Rally as Oil Near $47 Bloomberg - 2 hours 51 minutes ago

    South Korea’s won strengthened and crude oil was little changed. The MSCI Asia Pacific Excluding Japan Index rose as equity benchmarks advanced in Australia, New Zealand and South Korea. Japanese shares retreated following their biggest jump in … More »

  • Tokyo shares open lower despite Wall Street gains AFP - 3 hours ago

    Tokyo shares opened modestly lower on Tuesday following a jump the previous day, despite a positive lead from Wall Street. The benchmark Nikkei 225 index fell 0.28 percent, or 46.51 points, to 16,690.98 ... … More »

  • EU to hand Apple Irish tax bill of over 1 billion euro, source says
    EU to hand Apple Irish tax bill of over 1 billion euro, source says Reuters - 3 hours ago

    The European Commission will rule against Ireland's tax dealings with Apple (AAPL.O) on Tuesday, two source familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes. The Commission … More »

  • Why Do People File For Bankruptcy In Singapore?
    Why Do People File For Bankruptcy In Singapore? DollarsAndSense.sg - 3 hours ago

    Being a bankrupt does not mean you can default on all your debt The post Why Do People File For Bankruptcy In Singapore? appeared first on DollarsAndSense.sg. … More »

  • Mondelez abandons pursuit of U.S. chocolate maker Hershey
    Mondelez abandons pursuit of U.S. chocolate maker Hershey Reuters - 3 hours ago

    The abandoned deal, which would have created the world's largest confectioner, underscores the grip that a charitable trust has on the maker of Hershey's Kisses and Reese's Peanut Butter Cups. The trust which controls Hershey was set up by the … More »

  • Traders Said to Discuss Data Superhighway From Chicago to Japan Bloomberg - 4 hours ago

    The project, dubbed “Go West,” would install a line of microwave towers from the Chicago area to the U.S. west coast, possibly ending near Seattle, and then connect to an undersea cable that stretches to Asia, according to the people, who asked not … More »

  • US alarm as Turkey warns Syrian Kurd militia of more strikes
    US alarm as Turkey warns Syrian Kurd militia of more strikes AFP News - 4 hours ago

    Turkey warned Monday it would carry out more strikes on a US-backed Kurdish militia in Syria if it fails to retreat, as Washington said President Barack Obama will meet his Turkish counterpart over the weekend. Turkish forces pressed on with a … More »

  • Shell restarts gasoline-producing unit at Puget Sound refinery Reuters - 4 hours ago

    HOUSTON (Reuters) - Shell (RDSa.L) restarted a fluid catalytic cracking unit (FCCU) at its Puget Sound, Washington refinery on Aug. 23, according to a regulatory filing published on Monday. The unit was ... … More »

  • Business Highlights Associated Press - 5 hours ago

    ___ Mylan launching cheaper, generic version of EpiPen The maker of EpiPens will start selling a cheaper, generic version of the emergency allergy shots as the furor over repeated U.S. price hikes continues ... … More »

  • Island Standoff Again Clouds China-Japan Ties in Run-Up to G-20 Bloomberg - 5 hours ago

    One of the reasons China may be escalating its activity in the East China Sea is to warn Japan against getting involved in the South China Sea spat. While not a claimant in those waters, Japan has drawn China’s ire for supporting Southeast Asian … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.123-0.001-0.81%
    N21.SI
    0.3550.0000.00%
    E5H.SI
    0.32+0.01+3.23%
    5OT.SI
    0.49+0.02+3.16%
    588.SI
    0.990.000.00%
    H64.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.485+0.050+11.49%
    IX2.SI
    0.17+0.02+9.68%
    M11.SI
    1.115+0.065+6.19%
    A23.SI
    0.27+0.02+5.88%
    E28.SI
    0.375+0.020+5.63%
    BAZ.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.11-0.04-26.67%
    5TI.SI
    0.18-0.02-10.00%
    A04.SI
    0.183+0.003+1.67%
    BOU.SI
    0.20-0.01-4.76%
    K22.SI
    0.565-0.025-4.24%
    BMH.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3609+0.0016+0.12%
    USDSGD=X
    1.52060.000.00%
    EURSGD=X
    1.7810-0.0005-0.03%
    GBPSGD=X
    75.0270+0.11+0.15%
    SGDJPY=X
    5.6960-0.0064-0.11%
    SGDHKD=X
    2.9752-0.00010.00%
    SGDMYR=X
    9,740.8574-11.6465-0.12%
    SGDIDR=X
    4.9051-0.0092-0.19%
    SGDCNY=X
    1.0297-0.0002-0.02%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,326.70-0.40-0.03%
    GCZ16.CMX
    18.75-0.02-0.10%
    SIU16.CMX
    96.93+1.14+1.19%
    ^XAU
    2.09+0.01+0.60%
    HGU16.CMX
    47.09+0.11+0.23%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.18-0.06
    ^FVX
    1.57-0.07
    ^TNX
    2.22-0.08
    ^TYX