The 30 minute USD/JPY had been trending higher until prices tested the 90.80 minor psychological level with a 90.81 high. The subsequent pullback has set up what could be an early look at the swing entry. A swing entry within an uptrend requires pullbacks to support levels that will attract buyers. Using tools such as Daily Pivots and Fibonacci Retracement can help identify these swing buy levels.
Overall, the USD/JPY remains range-bound as can be seen on the daily chart of the pair. Prices are being squeezed by downtrend line resistance and a pair of uptrend line support levels as the price range continues to narrow. It is for this reason I have chosen to focus on shorter term intraday time frames like the 30 minute chart. I feel there is less likelihood of a trigger following through on longer intraday time frames like the 240 minute when the daily is range-bound.
The 30 minute chart has already confirmed today’s pivot point support at 90.36 as prices bounced along this key level before rallying higher towards the 90.80 minor psychological level. Prices did not seem to acknowledge the 90.50 level so traders are willing to keep the intraday USD/JPY between 90.36 and 90.81 for the near term.
The swing entry supportlevels that I am watching are postitioned near the 34 period EMA high which is currently at 90.40. Consider that the 38.2% Fibonacci Retracement support is at 90.36 and this is overlapping with the pivot point making this level a very strong support that could be an effective entry for a swing buy. This Fibonacci Retracement was drawn from the 89.62 low to the 90.81 high.
Traders familiar with Fibonacci Retracements know that there is seldom just one rally or sell-off from which the Fibonacci Levels can be calculated. I think in this case there is another shorterally that is worth a look.
Here the move from the 89.93 low to the 90.81 high has identified a 50% Fibonacci Retracement level at 90.37.
The swing trigger could rely on the area between 89.36 and 89.40 for support and a continuation higher within the current uptrend on the 30 minute USD/JPY. Remember that the trend must continue to maintain a twelve to two o’clock angle of the 34EMA Wave in order to confirm the uptrend. If the trend transitions to a sideways market cycle, the swing buy entry is no longer valid.
To learn more about Fibonacci, Pivots, my 34EMA Wave, and Swing Trading, keep an eye on my Weekly IBFX Classroom Sessions for topics, dates, and times.
*Please note that nothing in these blogposts by Raghee Horner is a recommendation to buy or sell currencies.
Due to volatility in the market during news announcements, trading during economic news is inherently risky. As with all major economic releases there could be significant price volatility with this announcement. Currency spreads will typically widen just before the release and will remain wide for a few minutes after. If the announcement is a shock to the consensus estimate, the price of the currency pair could gap significantly. For example, the price on the EURUSD trading at 1.2820 - 1.2822 just before release could gap up 60 pips to 1.2880 - 1.2882, without any available prices available between the price of 1.2820 and 1.2882. A Buy Stop placed before the announcement at 1.2830 would turn into a Market Order and would be filled at the prevailing price 1.2882. The same would be true with a Sell Stop.
During news, plan on the spreads widening and if you are trading with a Buy or a Sell Stop entry order, do not anticipate being filled at your entry price. You will be filled at the prevailing market price after the release, and this market price could be significantly different from your desired price of your entry order.
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