Today, our goal is to summarize how to profit from Forex trading using long term charts!
And when observing the Yens charts, it seems highly probable that a huge trend continuation of Yen weakness might be around the corner….
This could mean massive moves on not only the USDJPY but especially EURJPY and GBPJPY.
This is definitely an article which you want to read carefully. Please leave a comment down below so that I know everyone is on board with this game plan! Thanks!
Lets start our article by focusing on Forex trading using the long-term charts on the USDJPY.
The USDJPY has been in a massive up trend ever since October last year, posting higher highs and higher lows week after week.
The uptrend speed was enormous, which can be easily seen when looking at the angle of the 50 ema moving average which is very steep.
Of course there were some boring moments within the great uptrend.
- During the months of February and March, the trend stalled for a short while half the month, only to resume its march northwards towards the end of both months.
- More recently the USDJPY has not been able to break through the psychological 100 price level and the yen has had again a recent stall of 3 weeks. Then again, price has also been stubborn to move down, indicating that the bulls and bears are in a tight balance.
The big question is: will the 100 level break?
1) Placing a Fib on the week chart shows that price bounced off a 236 Fibonacci retracement, which is a very shallow retrace.
2) With such a shallow retrace there is a very high probability that the currency will go take out the -0.272 target at 101.50 and maybe even the 0.-618 target at 107.50.
Also , the day chart clearly shows a great uptrend. The currency has broken the high of 96.70 posted on mid March and is making higher highs and higher lows once again.
Note these interesting observations:
- The correction has almost entirely taken place above the previous tops. There were just a few hours of price action that actually took place below the 96.60. Such a decent sized correction in terms of time on the day chart taking place above a previous tops most likely indicates strength in the currency;
- The currency has made a 3 wave correction ever since the last impulse. The impulse is the green line on the day chart. The correction are the 3 red lines. This too favors continuation. And that continuation could even happen soon, maybe this week.
- Alternative variant: the 100 level could be very tough to crack. If an immediate break fails, then the USDJPY could build a bigger contracting triangle before breaking. In that case the USDJPY would make one more up and down before moving to the upside impulsively.
The 4 hour chart confirms the daily chart and shows just how massive the move up has been. The correction could very well be over. If we do break the 100 level, make sure to grab the hook backs to the 100 level. The retests are always great trades.
EURJPY + GBPJPY
The Yen crosses could be facing similar uptrend continuations!
These potential trade setups could provide Forex traders with great pips and profit potential and every trader has to make sure that they are well positioned for this great Forex trading using long term charts 🙂
The EURJPY week chart has an interesting Fib target setup:
1) When Fibbing the very very first move up, the currency is now at the -2.618 target at around 129.40. In massive trends the currency has a decent likelihood of eventually making it all the way to the -4.236 Fib target! That target is at 145! Another 1,500 pips to the north! Wow.
2) When placing a Fib on the 3rd wave there are -0.272 and -0.618 targets at 135 and at 144.50.
3) There is Fib target confluence at around 145 with both a major -618 target and a massive -4.236 target.
4) Of course the currency will not reach those levels in one shot. But once the tops at 131.20 break, there could be nothing more to hold back this EJ and there is a high chance of continued higher highs and higher lows.
5) The EJ has a similar structure as the USDJPY. It too is making a corrective pattern is either about to break out of the triangle or increase the wedge wider.
The GBPJPY week chart has many similarities to the EURJPY and the USJDPY.
There is one major and crucial difference: the GBPJPY has already broken the top!
1) The week chart shows great profit potential. The bigger -1.618 target is at 159, while the -1.618 target is all the way at 175.
2) Smaller -618 targets are at 162.
3) The currency has already pushed out of the triangle and is making a higher high confirming the uptrend.
Are you going to trade the GBPJPY? If yes, let us know what price you looking for? If not, let us know why! Would love to read your feedback down below! I am waiting for a hook back to the broken top at 153.70-90 with a Stop Loss below the lows at 150.60, targeting 162 and 174!
Al righty folks, that is about it! Wish you Good Trading this week! Hope you enjoyed this article on Forex trading using long-term charts.
If you want to start your day with a bit of humor, then make sure to check out this cartoon about the Forex market: http://winnersedgetrading.com/forex-comedy-cartoon-currency-wars-sunday-may-5th-2013/.
Here is Friday’s article on Fibs by the way: http://winnersedgetrading.com/how-to-trade-using-fibonacci/.
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