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Contributors Trade Idea for the 9th -10th February 2014 – USD/JPY

vinsonThe first formal task acting as chair of the Federal Reserve commences on Tuesday, as Dr. Yellen takes on the challenge with her first debut speech on the same day. Five years went by, with easy flow of stimulus under Bernanke’s ruling but now, a drastic change of policies is underway and the question is; will this new turn of play be as radical to the US economy as some maybe expecting for not only the week ahead, but for the whole of 2014 ? 

As most concerns about the cutting back on stimulus and bond purchases be aired and dealt with on Tuesday, the next day will see to another announcement by UK’s central bank, the BOE. This said, news and updates from both Yellen of the Feds and Carney of the BOE needs to be given much importance by traders and investors as these are events that may move markets this week.

Screen Shot 2014-02-09 at 5.52.09 PM

Due to the expected move from Yellen’s speech being the first for the week to be of possible effect to the markets, let us take a look at the USD/JPY 1Hr chart as shown above. As clearly illustrated above, a ‘W’ pattern seems to be forming with prices possibly progressing upwards form C to D and a fall in prices is expected once the pattern has completed within the Price reversal Zone (PRZ) marked by the blue box as probable D point. The Dollar seemed to have been trading above all three Moving Averages ( 50, 100, 200). Additionally, due to a strong positive correlation of the dollar to both the EUR/JPY and the GBP/JPY and with bullish sentiments dominating the two pairs, USD/JPY is expected to follow suite. The USD/JPY closed at 102.31 as of Friday and ideal entry for buyers would be preferred to be a conservative one at above the 103.50 level ideally at either 103.55 or 103.60 with take profit levels be anywhere in within the blue box which marks the PRZ zone at D point.

Once the W pattern is said to have completed within the PRZ area, sellers may dominate by driving prices lower from the ideal sell entry prices at 103.10 towards the horizontal purple lines between 102.55 to 102.13 as your possible take profit (TP) area.

Happy Pipping !

About Kenny Simon

kennysimonKenny Simon is Head of FX Training and the Asian Markets at Vinson Financials (https://www.vinsonfinancials.com). He is a contributor for the Educational and Technical Analysis section of several reputable websites. Being a fan of the wonders of nature, he  believes that trading in-harmony with the market’s natural ebb and flow could potentially increase one’s success in obtaining Low Risk, High Probability Trades. Besides the technical aspects of his analysis, Kenny emphasizes the importance of understanding and applying Fundamental Analysis, Money & Emotions Management into one’s approach to trading the markets.

 

 

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