Wednesday, March 5, 2014

Trading Week 03/03/14: EUR/JPY

Thurs 6th March (7 am)
No new TS signals. 

I will update more later. Taking son to hospital casualty...again!

Wed 5th March (9 pm)

No new TS signals. 

The A/J and U/J continue to move in profit BUT, as already noted, these signals were not supported by the Ichimoku Cloud.

Wed 5th March (12 noon)

EUR/JPY: I used to say that I 'stalked' certain stocks and currency pairs. The presenter at a recent trading talk I attended suggested that perhaps I am more of an 'archer'; choosing my few arrows from the quiver quite carefully as opposed to a general hunter. Well, I have the E/J in my sights.

There have been very few 4 hr chart momentum signals recently and I put this down to the choppiness surrounding the S&P500 as it navigated its 'triple top'. There have been geo-political concerns that have also played into the markets this week creating some further indecision and prolonging this choppiness. There is also a lot of  high impact data being released throughout this week and the markets are clearly waiting on these as well. 

One of the currency charts that interests me most from a technical point of view at the moment is the E/J. This pair is coiling within the apex of a symmetrical triangle and is doing so around a major S/R level; the 61.8% fib of the 2008-2012 bear move. Panning out to the weekly and monthly charts shows that this chart has also a bit of a 'Bull Flag' look to it:

E/J 4 hr

 E/J daily

E/J weekly

 E/J monthly

Ichimoku Charts: I like to see confluence across the Ichimoku Cloud charts and the E/J looks ok on that front. It is trading above the Ichimoku Cloud on the 4 hr, weekly and monthly time frame and is close to the top of the Cloud on the daily time frame. Any bullish triangle breakout on the 4hr chart would coincide with the E/J moving up and out of the daily Cloud which would help to support any bullish continuation:

E/J daily Cloud

I'm on the lookout for any breakout either up or down but, on looking across at the S&P500, I suspect that this move could be 'up'. The S&P500 continues to trade higher:


S&P500 Ichimoku Cloud chart

The E/J is quite highly correlated with the S&P500 as the following chart shows. There has been a bit of divergence just recently but I'm on the lookout for any realignment here:

E/J correlation with S&P500

I'm simply suggesting to watch this pair this week as it probably has the cleanest technical pattern evolving on its charts.  See whether ECB news on Thursday might promote some movement here and, even, trigger a triangle breakout. Keep an eye on the S&P500 too!

Targets for any possible bullish breakout are best gauged on the monthly chart. The 143 would seem an obvious first target but, after that, it might be all the way to the 100% fib up near the 170 region!

E/J monthly chart for any bullish targets

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