Looking for a way to trade the dollar today? I found a short-term forex setup on USD/JPY that you might want to look at.
Does this setup look familiar to you? It should! Heck, it looks almost exactly the same as the EUR/USD range trade that we spotted earlier this week.
This time around we can take comfort in the fact that the range has been holding since the start of September and that Stochastic is currently in the overbought region. So, if you’re one of them traders who don’t expect a lot of volatility from today’s NFP release, then this setup is for you.
A short trade order around the 120.00 handle is a good idea if you think the Greenback will take a few steps back against the yen today. This could happen if we don’t see improvements from not only the non-farm payrolls release but also the average hourly earnings and the unemployment rate. A stop just above the handle (although I would caution against tight stop losses during tier 1 events like these) could get you some pips if you expect USD/JPY to head to its range support near 119.25.
If you think the dollar is in for more gains though, then you can wait until after the release and see if the pair breaks above its previous resistance levels. Keep in mind though, that the dollar’s price action had little follow through in the last NFP release.
What do you think? Is USD/JPY about to test its range support or resistance today? Which direction do you think the dollar will go after the NFP release?