Trade Idea: 2013-1-18 2:03 am EST
With USD/JPY in the middle of a uptrend on the longer-term time frames, I thought I’d try to find a long setup on the pair. When I zoomed in the 1-hour chart, I noticed that price is currently above the 100 and 200 SMAs. This, to me, signals that the bulls are in complete control of the pair and the bias is for more gains.
I also spotted a bullish flag chart pattern. This normally happens after a strong move up, and suggests that another rally will occur. That being said, I think I’ll jump in long once the 90.00 level breaks.
On the fundamental side of things, I believe that the recent string of positive data from the U.S. would continue to support the dollar. I know that these may not be enough to convince FOMC members to end QE3, but the unemployment claims coming in at their 3-year low should account for something, right?
Of course, it also helps that markets expect that the BOJ would ease monetary policy even further. I’ll be closely looking at its upcoming rate decision on Monday. If the predictions are right, I won’t be surprised to see USD/JPY fly past the 90.00 handle!
Buy at 90.20. Stop loss at 89.50. Profit target yet to be determined. Risk disclosure.