IFC Markets - Analytics

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    Technical Analysis USDJPY : 2015-02-19

    Expecting triangle breakout

    We would like to focus your attention to USD/JPY currency pair on the H4 chart. Trade Balance in January has been released this morning in Japan. The data was positive and it slumped 58% as imports dropped 9%. Basically it was caused by low prices for hydrocarbons. Exports rose 17% and appeared to be better-than-expected. We deem that the yen didn’t strengthen much as investors started to be fretted about the very existence of the trade deficit in Japan that has been lasting for 31 straight months. Therefore, we believe that the yen hasn’t left the sideways market yet. The US dollar is also still moving in a range. A number of less important economic indicators will be published today and tomorrow in Japan and the United States. They may affect the exchange rate if differ strongly from the tentative outlook.


    USD/JPY is located in a triangle on the H4 chart. The last bars of RSI-Bars are also in the neutral range near 50. The definite trend movement may appear after the price leaves the triangle. In this case, the most cautious way is to place two opposite pending orders. Let the market choose the direction. The strongest levels at 119.406 and 118.231 are confirmed by Bill Williams fractals and Donchian Channel boundaries. Two positions can be placed at the opposite levels: after one of the orders is opened, the second one can be deleted. It means the market has chosen the direction. After pending order activation, Stop loss is to be moved every four hours near the next fractal high (short position) or low (long position), following Parabolic values. Thus, we are changing the probable profit/loss ratio to the breakeven point.


    Position Sell
    Sell stop below 118.231
    Stop loss above 119.406



    Position Buy
    Buy stop above 119.406
    Stop loss below 118.231

    Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.

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