USDJPY: It Is About To Breakout! But In Which Direction?
As noted in my recently released “Monthly Currencies Analysis Major USD-Crossed Pairs – May 2018“, my longer term analysis and recent re-analysis on USDJPY shows that we are about to see it breakout. This breakout should be STRONG and could give us a great “profitunity” to truly reap some significant amounts of pips! And this could happen within the next few weeks! So really, you don’t need to wait that long for it but you will need to be PATIENT in waiting if you want to get in with the lowest risk possible!
Fundamentally speaking, the Dollar is known to be a risk-on, risk-off currency. It is in most times a risk-on currency in that when economically and politically turbulent, investors flee from the Dollar and park money in Gold and other “safe havens”. That is why Gold and the Dollar have a negative correlation. Gold goes up, usually, the dollar goes down and of course, vice-versa. But when times are good, then investors want to move their money into risk-on currencies like the dollar in order to possibly capture greater returns on investment. Now, that is a VERY SIMPLISTIC explanation of how the dollar/gold relationship works and their correlation. There are many, many other factors that come into play such as inflation, trade deficits, GDP and others. But I am speaking in general terms here. The reason I do want to point out the fundamental aspect of what might affect the dollar is because of something historical that may be taking place…namely the North Korean – USA summit. That is supposedly scheduled to take place in a few weeks on June 12th in Singapore. Why is this significant to the USDJPY? Well, for one thing, this MAY cause the Dollar to just move sideways right up until that meeting takes place. Meaning again that we will need to be PATIENT and wait for something to happen. And if you understand what I just talked about above, then you know that the results from that meeting (or lack thereof) and the resulting actions that may follow will affect the dollar greatly! If some kind of deal is struck to pacify that region and the conflict between N.K and USA, then we should see the dollar climb as investors will see that as a signal of less volatility in the world and usher in a risk-on investing environment. On the other hand, should one or both parties walk away and nothing gets resolved or worse yet, walk away angry…then we will have a risk-off investing environment and the Dollar will sink as money flees the dollar and gets put into “safe haven” investments like Gold.
To tie things together, this is why we are seeing a Doji forming here as that represents uncertainty in the marketplace. Basically, the market is uncertain as to what is going to happen in this summit and is waiting to see. Given all these facts, it’s a tough trading environment for the USDJPY and also a tough call as to whether it will break out to the top side or sink down. For more answers, we can look towards both the Gold market and also the USDollar Index (DXY) for more clues. In the paid subscribers edition of this post, I will cover those as well to the effect it helps to give some more insight.
So want to know more? Keep reading…..
You’re reading the FREE version of this report and sure, you can decipher and extrapolate from it what you need to know in order to try to trade USDJPY on your own and make money. But do keep in mind that markets are fluid and often cause changes in outlooks and analysis. That is why I CONSTANTLY analyze and reanalyze the markets on a daily basis! What I believe will happen soon in USDJPY is of course valid only at the time of this publishing but who knows? Two weeks from now, things could’ve changed! That is why my current subscribers are so pleased with my service is because they get the latest, -up-to-date analysis on every market we cover so that they can make the best informed trading decisions possible! Not only to make money but to stay out of trouble as well! So if you are interested enough to be reading this publication, then I assume that you are interested in trading USDJPY. Then why not invest just a little to possibly get a lot? Our introductory price on our Basic Package is only $49.99 for your first month! That’s less than the cost of a cup of coffee per day! And I know you’re probably a Starbucks-a-day drinker! But does Starbucks make you money? No. But I can! Try us out. Subscribe now and get the FULL picture on what I think will be a GREAT Profitunity in the coming weeks! Just click the link below:
If you have followed me for awhile, you know my calls on USDJPY are legendary! I’ve picked many of the significant turns in USDJPY and have made my subscribers HUGE profits trading it! When I have made a call for a SIGNIFICANT turn coming in USDJPY, my record speaks for itself. Here’s a chart of the significant calls I have made in the past:
And the reason I am pointing this out to you now is that at this time, I am again making another SIGNIFICANT call for USDJPY to make a turn! It’s not here yet and there still needs to be more price action in order to confirm this turn but we will know in the next couple of weeks! So this is fair warning to you to be prepared. Let’s get to the analysis.
Three Bearish Scenarios And One ALT Bullish One
This is the updated monthly chart of USDJPY in which I expanded it to show what is currently happening and more importantly what it is telling us about what MIGHT happen next. What I point out here is that there is a Doji forming right now in this month that is occurring at a resistance zone. Now, before I go further, for those of you who know me and have followed me know that I don’t put high significance on candlesticks and candle patterns. However, I do have a strong background in candlesticks and yes, I do notice them and use them in my chart analysis when they are useful. So before you all who have some experience and/or knowledge in candlesticks point out that morningstar pattern below where the current prices are and tell me that it is indicating that prices should go up, let me give you my thoughts on it.
The Morningstar Pattern
In this below chart of USDJPY, here’s that morningstar pattern that I mentioned and some of you candlestick guys will point to as showing the market is about to explode to the upside. Is that possible? Yes. Of course it is. Its the market. Anything can happen. But here’s my reasoning on why I do not think this morningstar is so significant. Reversal candlestick patterns hold the most significance when they appear at the end of a MAJOR trend AND whatever momentum indicator you choose to use (in my case, the RSI) is showing an oversold condition. As you can see from my chart below, that is not the case here. Remember, this morningstar ONLY appears on the monthly chart so we must refer to a monthly trend. Not a lower time frame trend. Currently, the general trend is down. Is that a monthly trend? Or is it more of a weekly trend? That is not so straightforward to say one way or another. But on a larger scale, from the highs set back in June, 2015 which ended a CLEAR monthly uptrend, prices have been correcting DOWN. So we can say that the overall larger trend is down. So until this down trend reaches into an oversold condition, any reversal candlestick formation really does not hold tremendous significance. That’s NOT to say it holds NO SIGNIFICANCE and should be ignored! NO! Why? Its because the internal price action that caused the formation of that morningstar pattern does tell a story! But what it is saying must be seen in context of the overall big picture and not in isolation!
Ok, so now that I have gotten that out and explained my thoughts on it, let’s go back to what I am seeing about what might be happening in the USDPY and why I am seeing what I am seeing.
The Triangle Scenario
This is one the most likely scenarios that is possible. Prices may decline towards fulfilling that AB=CD pattern you see on my chart. If it does that and does not continue to drop too much more, then it would establish a lower trend line of that possible triangle pattern. That triangle pattern is a bullish triangle. Which could usher in a new and powerful up trend. But that is of course something to deal with at a later time SHOULD this scenario come true. This scenario is part of the one that is shown in the very first chart above.
The Zig-Zag Scenario
This scenario of USDJPY is likely should the Triangle scenario above fail and prices were to keep dropping. But it has to CLEARLY BREAK AND CLOSE below the VERY STRONG MAJOR SR support located around the 102.000 level. In this scenario, prices drop all the way down to fill this larger AB=CD pattern during this wave (X) correction.
The Extreme AB=CD Zig-Zag Scenario
This scenario of USDJPY is an extreme one as the title above suggests. This scenario is possible but would of course take years to unwind. And I don’t think it likely without a significant retracement occurring first. Which leads me to the ALT scenario next……..
The ALT Bullish Zig-Zag Scenario
Although this is my ALT scenario of what USDJPY could do, it is also very much possible. It is not an ALT scenario because it is unlikely but because I favor for USDJPY to move down and not up. But even in this scenario, prices should drop somewhat before it does reverse and go up as in this scenario. If price action does start to favor this ALT scenario, I’ll switch to it. And if/when I do, I’ll notify my subscribers and make a detailed explanation as to why and what the price action is saying.
What I am favoring is that USDJPY is bearish and one of the bearish scenarios should occur. You should be looking for the signs that prices are about to drop. Currently, I am looking for a SELL setup but at the moment, there is not one. So for the time being, as I said in the beginning, PATIENCE is needed to WAIT and see what is going to happen. Even though I have shown all these scenarios, at the moment there isn’t any STRONG signals that indicate any of them are correct.
Members – Please look for the [Members Edition] version of this post. Members Edition will break this idea down much more in-depth including drilling down to lower time frames to fine-tune the possible opportunities, covering correlative clues in the USD index and Gold to help determine what should happen and more on price action, advanced patterns, and fractals .
If you are not a subscriber yet, you can get the Member’s Edition by subscribing through the Basic Subscription 50% Discounted First Month Trial offer here: http://bit.ly/29x4bfM. If you don’t want to subscribe yet, then you can also get the Member’s Edition by purchasing it for only $19.95. You can buy it here:
However, if you subscribe not only do you get access to the Member’s Edition, but you also get access to coverage on 6 more forex pairs, twice daily updates on USDJPY and the other pairs and my profitable trade calls on those pairs. In addition, you get our 100% Trade Profits Guarantee! If my trades do not show profit in 2 months from the time you join, you can get a 100% refund on the subscription fees you have paid! That’s right! A 100% refund! So there is absolutely no risk to you! Either you make money following our professional analyst and trade recommendations or you pay NOTHING! That is how confident we are in our market analysis! So what are you waiting for? Subscribe here:
Click here for more information on our 100% Trade Profits Guarantee:
Members-Only Content Below (please be sure to login to your account to see it!)
Members: if you do not see content below, please login in order to display the “members-only” content below. If you are having any issues to see it, please contact me on Skype to let me know so I can help you. Thank you for being a member.