By: Doug Rosen
I begin my analysis with this pair first looking at the USD/JPY. It is very obvious to me that the USD/JPY is bearish on the weekly chart and the daily too and yesterday's price just touched the daily 55 ema and dropped. Based on all this it is obvious this the USD/JPY is bearish. However, when I look at the 4 hour chart it is very obvious that we are experiencing a change of trend. We are getting higher highs and higher lows and this is very noticeable on the 4 hour chart as well as the 1 hour chart. This may be of course just a simple retracement but we will just have to wait and see what happens when this pair reaches support once again. This is important to consider because even thought he USD has been very strong compared to the EUR and the EUR/USD has been quite bearish, a retracement to the upside may cause temporary USD weakness, so if the USD/JPY retrace to the upside this may cause an even weaker JPY so combine that with a slightly stronger EUR due to the EUR/USD retracement to the upside then a bullish EUR/JPY may soon exist. Let's now take a look at the EUR/JPY. Looking at the weekly chart for this pair it is obviously very bearish, riding the 5 ema down nice and smoother, yet the stochastics is in the oversold zone. Price is also a bit away from the 5 ema. Contact may soon be needed for this pair to continue on its path to the downside. Looking at the daily, once again, very bearish but lets not let this very bearish appearance fool us. Bears will take profit when they feel price has maxed out and price will retrace back to its daily 5 ema. The daily Stochastics is aso at the bottom of the trade zone trying to recover from oversold conditions.
Looking at the 4 hour chart I see that price has bounced off the lower Bollinger band and price is also in the oversold zone of the stochastics, same with the hourly chart as well with angle and separation between the 5 and 13 ema diminishing.
On the 15 minute chart we are getting some bullish ema crossovers as well as a stochastic crossover sharply pointing to the upside. Price is bouncing off the monthly and weekly M1 and has already bounced off the previous day's low overlapped with he daily M2 reversal pivot point. Realistically, I can see this pair rallying upward to the descending trend line on the 15 minute chart which happens to be overlapped with the 15 minute 144 ema also overlapped with the daily M3. I would be looking to counter trend trade this pair to that price level around 102.08 which is also a fib level of the recent swing down. Then, I would be looking to get out and plan to take a short at that level.
