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Contributors Top Trade Idea For November 3rd and 4th, 2013 – USD/JPY

liquid marketsPreviously, some technical issues occurred particularly the Nasdaq that has halted its’ options markets (NOM). This might have made us wonder how reliable today’s virtually ‘hi-tech’ driven financial world is, as it happened again just a couple of days ago. So what is really going on that we may not know about?

One of reasons is said to be due to the significant increase of orders that have inhibited its’ internal system to cope with building up orders. However, orders with the other instruments including the options markets should only increase in their demand or require a highly secure and efficient system to cater to the needs of investors in time to come. It is definitely a scary thought when one wonders whether technical advancement in the financial sector could be a double edge sword instead which will then require us to always expect the unexpected whilst taking whatever is heard with a pinch of salt.

USDJPY 3112013

With regards to economic events, it is a rather quiet week with only 5 ‘High Impact’ event that could potentially affect the US Dollar but do refer to the economic event as a gauge for opportunities ahead as well as additional confirmation to the direction of the Dollar.
From a Harmonic Pattern’s point of view, I have noticed a probable bearish ‘W’ pattern to have emerged as illustrated above. As you may have noticed, prices for USD/JPY on the 1hr chart are progressing from the C point trading upwards hopefully to be reaching the D point marked by any one of the horizontal red lines which could ideally be the Take Profit (TP) levels for the D point. Additionally, these possible take profit targets for the D point also map out the Possible Reversal Zone (PRZ) or in other words where the ‘W’ pattern may end.

Upon the completion of this probable ‘W’ pattern, prices are expected to reverse downwards in within the PRZ zone marked by the blue rectangle box as shown in the chart above. What this means is that upon completion of the so called ‘W’ pattern, you could be entering a sell order but in order to do that it would be advisable to enter a Sell once prices have traded under the PRZ zone ideally at the 98.90 level and the take profit level for the Sell order could ideally be at either the 98.25 ( as TP 1) or as low as the 97.85 level (as TP 2).

Happy Pipping !

About Kenny Simon

kennysimonKenny Simon is Head of FX Training at Liquid Markets. He is a contributor for the Technical Analysis section of LQD ‘s Blog. 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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