Want FULL ACCESS To
ROSS’ DAILY TRADE ROOM?
Simply Click The Get Started Button Right Now!
Transcript of Video
Click Here to receive an email alert when Ross posts a new daily video
I’m going to begin the day today on the US Dollar versus the Japanese Yen [USDJPY]. Starting on the Daily Chart, this currency pair has been in an uptrend for quite some time. We go all the way back into September of 2012, bottom left-hand side of the chart, down into the 77s. Since then, we’ve seen a continual rise out of this currency pair, even coming here where the blue trend line starts.
February of 2013, we can see a continual rise in the lows. That’s how we can define an uptrend. Rising highs and rising lows. So, if you look along the blue trend line, you see a continual rise along those lows. Five rising lows within this time period right here, and then, coming into current time, we could see a continual rise in the lows, as the market has continued to pressure higher in the direction of the uptrend.
Now, if we go ahead and zoom it in a little bit here on the Daily Chart, you could see the current timeframe, and this red box that you could see here on the chart goes all the way back into January of this year. So, since January of 2014, we’ve kind of been bouncing around in a range inside this red box and continued to find support of course above the blue trend line that we started looking at, but also above this blue-shaded area, which has held as our area or zone of support for the past several months, going back to the end of January, beginning of February.
That blue-shaded area goes between 101.20 or so. 101.teens and 101.60. That’s where that blue-shaded area is highlighting as our zone of support. You could see six times now coming down into this zone. And again, this is the Daily Chart, so there’s multiple days within those six times that found support into this blue-shaded area. Over the past five days, again, we can see support here into this blue-shaded area, just above the 101.50-level for the USDJPY.
And as long as it stays above that blue trend line that we began looking at on the zoomed out view and the blue-shaded area, which is our horizontal support since January, I expect there’s support and the potential for bounces and reversal to go back up. And as long as it stays above there, that’s what my preference or my focus will be for my trading on the USDJPY. Let’s go ahead and put an arrow here. As long as it stays within or above that blue-shaded area, I’m looking for buying opportunities into the mid to low 101s. Only if it breaks underneath this blue-shaded area, blue trend line do I begin to change my focus to the sell side, to the downside for the USDJPY.
So, focus on the buy side, looking for bounces and buys on dips for the USDJPY. Let’s go ahead and zoom it one more time here, on the Daily Chart, and we can see again there’s that area here. The blue-shaded area. The blue trend line. Including today, five days now holding here into that blue-shaded area, the blue trend line, as long as it stays above it. So, if you were here with me last week, you’ll know that I’ve been buying – from the Trade Room – here into the 101.50, 101.60-level, looking to target back to the green-shaded area.
Has not profited all the way back into the green-shaded area yet, but I expect, as long as the buyers are fighting off the sellers here into the blue zone, we’ll eventually see it back to the green zone. We can see resistance here in the green zone. The last time we came up here, found resistance. We can go back in time. See resistance here, resistance here, resistance here, some support and congestion here back in January. So, quite a bit of price action around the green-shaded area.
So, we already have identified the blue zone as our support. Now we can identify the green-shaded area as our next major resistance. And of course a break above that green-shaded area, we’ll look for the continuation of the uptrend. Back underneath the blue-shaded area once again, we go back all the way to the pink-shaded area as our next area for support. So, these three areas, blue-shaded area of course critical right now. Green is our next resistance. Pink is our next support for the USDJPY.
Forex Black Book-wise, we can see the trend bar, interesting enough, has stayed red this week. So, if you’re looking for a trade in the direction of the Forex Black Book, really what you need to see is a rise or rally higher first. It needs to go up, find resistance, and then turn around and start to go back down. That’s what you do with the Forex Black Book. You wait for bullish momentum, and then bearish momentum to come back for the USDJPY. So, we actually, even with the Forex Black Book, would like to prefer to see it to go back up towards the green area or higher to give us a new trading opportunity with the Forex Black Book.
Let’s go ahead and take this information down to the 4-Hour Chart. And really, this gives you a great example of what I just talked about with the Forex Black Book, where you saw the support here into the blue-shaded area, it came back up to the green zone, three red arrows happened while it was up here in the green zone, and then it went back down to the blue zone. So, that’s the great example of what you’re really looking for now. If you’re looking to trade the Forex Black Book, looking for a new bearish or sell signal for that indicator. You’re actually looking for it to go back up towards the green zone or higher. Then a new arrow to show up.
So, until that happens, I’m going to be focus in on the buy side down here into the blue-shaded area. As long as it stays above that support, buying on dips into the blue zone, targeting the green zone or higher. Then, as it goes back up, finds resistance. Then maybe we can begin looking for a new selling opportunity. The only other thing this week that I’ll be looking for would be a breakdown underneath the blue-shaded area. We’ll call it 101.20. Underneath the blue-shaded area, we’ll look for the continuation lower for the USDJPY.
