Yesterday was a dull day for USDJPY with a daily small doji gyrating within the range of 91.50 to 91.90 above the daily and weekly pivot point without touching the R1 level. The Bollinger Band was squeezed tightly for the whole day and a small tight triangle was formed that had it apex at early Asian Session. A possibility of a great breakout is expected.
On the 1 min chart below showed that at 02:31 (00:31 GMT), the blue lag break through the 15 level with Stealth LCD and Stealth Buy & Sell indicated a buy. The 6 period ema cross over the 12 period ema from below at one minute later, and 5 minutes later the two ema’s cross over the 50 sma confirming the bullish sentiment.
USDJPY broke the pivot point and the spud fibo retraced, first the 50% and consequently the 61.8% and 76.4%. My profit target for this 1 min scalp is at double zero level of 92.00.
USDJPY trading during the Asian (Japanese) session is usually reflected by a herd-like behaviour which often resulted in large, volatile moves followed by extended period of sideway consolidation as the Japanese institutions responds en mass to break of key levels and then settle down.
Due to high involvement of Japanese institutions in USDSJPY means the cross tends to respect technical levels more than other crosses. The cross responds more quickly to breakout of key levels rather than waiting for pullbacks or a bounces. There tends to be clustering of market orders around key technical levels, which favour of placing stop-loss of 5-15 pips just beyond key technical levels. Another point to remember is the heavy emphasis on application of candlesticks in USDJPY. Finally, other major yen cross such as the EURJPY can exert pressure on USDJPY, for example a technical break on EURJPY can spill into USDJPY and push it out of the driver’s seat.
The above points can be shown on the my subsequent 1 min scalp. (Refer to the chart above)
USDJPY find the top with a hangman at 3:14(1:14GMT). 10 minutes later a Stealth Buy and sell indicated for a short order. It was confirm 1 minute later with 6 period ema cross 12 period ema from above. Since the trend is up, my short position is a counter trend. Target profit of 10 pips is achieved when the cross touch the lower BB and 50 period sma.
At 3:36 Stealth LCD and Buy & Sell indicated a buy and two minutes later the 6 ema cross over 12 ema from below. 4 minutes earlier the blue lag had climbed above the 15 level. I am looking for a 20 pips profit i.e expecting USDJPY to test the round number at 92.20. USDJPY broke the 92.00 and gap up to break the R1. It did reach 92.19 and turn down toward the R1 without any technical sign of closing the reversing position. I hang on to the position with expectation that USDJPY to touch R2 at 92.37.
