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- Best trades for Asian session: USD/JPY – Long; NZD/USD – Long;
Best trades for Asian session: USD/JPY - Long; NZD/USD - Long;
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Loading...1. USD/JPY - The dollar convincingly regained its strength, as the Dollar index managed to activate the reversed H&S, and is currently adjusting to Neck line levels - good levels of which we can think USD will continue to rise.
By looking at the USD crosses, it is an impression that USD/JPY is at good purchasing levels.
In the long run, the price has succeeded in activating a flag formation and penetrating a 50% flag correction, which makes us think that from here, the upward movement is more likely.
Let's look at the price movement in detail and we can figure out what the possibilities are from now on. The price corrected after the diagonal breakthrough and reached a horizontal support area, combined with a 23.6% Fibonacci correction. We also have a bullish reversing bar at support levels - positive for the price. RSI (14) also recurs from the area near 50, and along with the screaming bar formations gives us a strong signal for Long. 50 over 200SMA - also positive for the price. An entry from the current levels will require a Stop Loss order at around 112.70 levels, below the horizontal and diagonal levels of support.
What are the price barriers? Technically, the first hurdle is the area around 114.35, where the price tried to break through three times and failed. That is where we can look for signs of both a breakthrough and a liquidation of the long ones after an unsuccessful one.
Alternative scenario: If the price goes back below the horizontal and diagonal support levels, the positive scenario will break and more likely to see a USD/JPY price drop.
2. NZD/USD - The price movement forms a broad consolidation starting in September 2016. The price is currently at the bottom of the consolidation, forming a bullish reversing bar and two bullish pin bars. This shows that the levels are strong and traders are willing to buy large quantities. RSI (14) goes out of the over-sales area - a positive signal. Taking into account the much better employment data, our expectations are NZD to cover part of the losses accumulated in recent weeks. Strong technical and fundamental data gives us a good positioning capability Long with SL: 0.6805 and a first target of 0.7060.
Alternative scenario: If the price went below the level of horizontal support and held there in several consecutive bars, the positive scenario would be spoiled, and more likely to see a decrease in the NZD value.
Jr Trader Petar Milanov
Varchev Traders Read more:
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