Buy above 110.21. Stop loss at 109.72. Take profit at 111.43.
Reason for the trading strategy (technically):
Price has been dropping perfectly towards our profit target. We prepare to buy above major support at 110.21 (Fibonacci extension, horizontal swing low support, bullish divergence) for a push up to 111.43 resistance (Fibonacci retracement, horizontal overlap resistance).
RSI (34) is displaying bearish divergence vs price signalling that a bounce is impending.
Correlation analysis: We’re expecting general JPY weakness on AUDJPY and USDJPY so this goes in line with our view.
Reason for the trading strategy (fundamentally):
The main news event driving USD today is the U.S. ISM Manufacturing survey. It is one of the biggest market moving economic releases because of its Prices Paid and Employment subcomponents which reflect sentiment towards inflation and labor conditions - two of the market's most significant health indicators. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. We’re expecting forecasts of an decrease which means a bearish USD is expected, this goes against our bullish USDJPY view hence it is best to exercise caution on this trade.
Reason for the trading strategy (technically):
Price has been dropping perfectly towards our profit target. We prepare to buy above major support at 110.21 (Fibonacci extension, horizontal swing low support, bullish divergence) for a push up to 111.43 resistance (Fibonacci retracement, horizontal overlap resistance).
RSI (34) is displaying bearish divergence vs price signalling that a bounce is impending.
Correlation analysis: We’re expecting general JPY weakness on AUDJPY and USDJPY so this goes in line with our view.
Reason for the trading strategy (fundamentally):
The main news event driving USD today is the U.S. ISM Manufacturing survey. It is one of the biggest market moving economic releases because of its Prices Paid and Employment subcomponents which reflect sentiment towards inflation and labor conditions - two of the market's most significant health indicators. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. We’re expecting forecasts of an decrease which means a bearish USD is expected, this goes against our bullish USDJPY view hence it is best to exercise caution on this trade.