It’s all about the yen on today’s canvas, as we play around with swing and long-term trade opportunities on USD/JPY and CAD/JPY. Check ’em out, yo!
First up is a potential reversal on USD/JPY’s 4-hour time frame. As you can see, the pair is back to retesting the 107.00 psychological handle after trading above the level last week.
What makes the setup more interesting is that the 107.00 MaPs currently lines up with a rising trend line support at the same time stochastic has hit oversold status. What’s more, the 100 SMA has also just crossed above the 200 SMA!
Are we looking at a reversal over here? Buying at current levels could get you in at a good price if you think that the dollar will gain momentum against the yen.
If you’re not too sold on a trend change just yet, then you could also wait for a retest of the 100 SMA before you jump in. Whichever strategy you choose to implement, make sure you use risk management in executing your trades!
Range traders huddle up! CAD/JPY is lollygagging around the 85.25 level, which isn’t surprising since the level is right around a 38.2% Fib retracement, 100 SMA retest, AND a mid-range resistance on the daily chart.
The cherry on top of this sweet setup is an overbought stochastic signal. Question is, will all these really lead to Loonie weakness against the yen?
Shorting at current levels could give you a good reward-to-risk ratio especially if you aim for the previous lows near 81.00 and place your stops just above the Fib levels.
Don’t tighten your stops too much, though! Yen crosses like these can see volatility like nobody’s business, so make sure you leave enough room for wonky price action!