I can’t believe it’s been three weeks since I last posted a chart here. Well I did slow down a bit over Easter but no more excuses. Let’s get right into it.
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USD/JPY 1hr chart. Red arrows show my short entry at confluence of downtrend channel and horizontal level (which later became 38.2%). Stops above the red line. No fixed target.
Now it’s not in my nature to hold trades for a really long time (more than a few days) which is why I don’t have a set target for this trade. My current thoughts are to wait for a buy signal to cover or to cash in on some kind of capitulation should one occur.
But the WEEKLY chart below is telling me to hold a short position. It shows previous counter-trend moves that have occurred in the last two years and the current rally which is consistent with them. Add to that a resistance level at 85 and your own choice of overbought indicators and you have a solid case for a continuation of the long term downtrend to possibly test and kiss the broken downtrend line together with the 75 support line.