Well, USDJPY certainly didn’t disappoint today. I mentioned yesterday that this market had broken out of consolidation after closing above the 102.80 level. I was looking for a pullback to support before entering long but unfortunately that pullback never came.
The pair posted one of the largest gains of 2014 today after closing near the high of 103.84. I do think we’ll see some resistance from the April high around 104, but this market has a lot of room to run.
So where do we go from here? The market is far too extended at the moment to consider buying so we’ll have to wait for a pullback. The 103 area would be nice but given the strength of today’s move I’d be surprised if we see a pullback of that size any time soon. Therefore I’m looking to the 103.35 area which has acted as support and resistance since May of last year.
Summary: Look for a pullback to support in the 103.35 region and then use bullish price action as confirmation for a long entry. Key resistance comes in at 104 and the year open at 105.40.
NZDUSD caught my eye today as it broke below major support. Combine this with the recent break of trend line support and you have a market that might be seeing a lot of red days over the next few weeks.
From here there only appears to be minor support areas before reaching the next key support level at .812. This gives us a lot of room to work with.
Summary: Watch for bearish price action on the 4 hour chart around .8387. With the right price action signal this could make for a very favorable setup.
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