USDJPY Confirms Above Ichimoku
Hallelujah! Am I only dreaming or this is real? USDJPY confirmed above Ichimoku cloud for the first time in a whopping 10 months this week. Now all we need is another signal to fully change our outlook to bullish. And what is that, you ask? Read on my beautiful diva.
Technical Analysis – USDJPY Confirmed Above Ichimoku
The Dollar Gods have spoken and Ms. USA is gaining back her momentum on the Forex dance floor. The USD/JPY pair is officially above the Ichimoku cloud and above the pivot level of 103.50, stretching towards the next pivot of 23% Fibonacci at 105.25 during the Thursday’s early Sydney session.
The US dollar strength on Wednesday was specifically due to FOMC minutes which showed the Fed may be up for a rate hike relatively soon. A break above the 23% Fibonacci could indicate further gains towards resistance of 108.70.
A shocking risk event out of the US to turn the pair back below the Ichimoku cloud would change our outlook back to bearish. Support is laying strong at 100.
During the New York session we have the US Initial Jobless Claims (OCT 8) out at 12:30 PM to further shake the USD crosses.
During the following day’s Asian session Japan will release a number of stocks data which could also impact the USD/JPY pair.
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During the Asian session China’s Consumer Price Index will out to shake the markets.
During the London session, the UK will release their Construction Output at 8:30 AM GMT.
The US is set to release their Retail Sales as well as PPI at 12:30 PM GMT and later the Prelim UoM Consumer Sentiment will be out at 2 PM.
However the most anticipated event of the day won’t happen until 4 PM, when Fed Chair Yellen Speaks at Boston Fed Conference.
Investors will be all ears to see what she has to say about last week’s NFP, or if she has any intentions to increase interest rates within 2016.
Trading Strategy – USDJPY Confirmed Above Ichimoku
With growth in US economic data, anticipations of a 2016 rate hike, and the October effect, the USD/JPY pair has finally confirmed above the Ichimoku cloud. This already is good news for the USD bulls. However we have one more barrier to break above: the 23% Fibonacci level.
Bullish Scenario: If you have been following my signals and have high risk tolerance, you probably are already in a bullish trade for USD/JPY targeting 105.
For those with lower risk tolerance, we need yet another confirmation signal by break above 105.25. So yeah… stay tuned my love!
Bearish Scenario: We could certainly see a temporary pullback at around 105 which could be a pip-making chance for short-term traders.
However for us to change our outlook to long-term bearish again, we need the pair to go nuts and move back down below the Ichimoku cloud.
Only a break below 100 could open doors to new 2016 lows.
Here are Invest Diva’s calculations for important USD/USD approximate levels to keep an eye on from a long-term perspective:
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