14, February 2013

USD/JPY (a 4-hour chart)

USD/JPY (a 4-hour chart)

General overview

Running through standard Ichimoku check-lists we can see that the price could not leave the Ichimoku cloud area and fixed above the Kijun-Sen forming a new "Golden Cross." The current buy signal is confirmed and strong as the Chinkou Span is below the price chart and the price is above the Ichimoku cloud.

For the current moment the goal of an upward movement is the second level at 94.65, as the price has successfully worked out the first resistance level at 93.73. Still the price will continue going up to 94.65 if it consolidates at 93.73.

The upward movement will be actual as long as the price is above the Kidjun-sen (93.28), If the price consolidates below this line that will question the upward movement and “Golden Cross” will weaken in its turn. In this case the price may move back into the Ichimoku cloud.

The Chinkou Span is located above the price chart confirming the current signal to buy. Thus we stand for a bearish view of the market.

Bollinger Bands indicate the upward movement; lines are expanding and directed upwards, so now it is recommended to consider only long positions.

MACD is directed down telling us about possible correction. If the price consolidates below the level 93.73 we will receive another signal for a downward correction.

Trading recommendations

We recommend holding your positions until we get the clear signal to enter the market. The price can go any way right now. If it manages to pullback from the Ichimoku cloud it will be set on the upward path. Still a correction might be started with the first target seen at 92.17.

When overcoming this target short position may become actual to the level 90.83.

Stop loss we place below 93.35 and when this line goes down we can move the stop-loss after it.

It is recommended to close manually long positions when MACD goes down. Stop loss can be placed to the non-loss area. Take-profit can be set slightly above the target levels.

Apart from the technical picture it is necessary to consider the fundamental data and the time of its release.

In case front-running deals are possible, you can take a smaller timeframe (M15-M30) and follow the reversal of the trend indicator (Heiken-Ashi, for example) near the price level where the price reversal will probably take place.