USD/JPY EUR/JPY GBP/JPY

Whenever I write a new blog post I always set out to write more words than usual, to add some commentary to the charts, a bit of humour and some general banter about the world. And nearly always I’m confronted with writer’s block. Today is no different so to hell with lots of words and let’s get stuck in to the charts.

PS. You will notice references to the RSI indicator today. I’ve always dabbled with indicators, never really serious with them, preferring straight lines, but lately I’ve been studying RSI and looking at it in a different way. I’m very happy with the way I’m reading it and the signals it’s providing – so confident enough to share. 🙂

First up is the chart I always look to first – USD/JPY. I rarely trade this pair but it provides me with bias for trading other xxx/JPY crosses. The DAILY chart above shows three clear levels with current price possibly making a higher low above the 78.00 level. I’d like to view this as bullish for xxx/JPY but it’s a bit too simple so let’s look deeper and check out the hourly.

The hourly chart above shows another clear barrier at 78.75 that would need to be overcome – sooner rather than later. And keep an eye on the hourly RSI – the first time it crosses 70 is not overbought but a sign of strength and it’s often just the beginning of a nice move. So no clear long signal yet. The recent dip below 30 may be the beginning of weakness. Now on to the other pairs that I’ll actually trade.

In the EUR/JPY Daily above I’ve identified three common UP moves over the past 12 months. You’ll see it has recently completed the small move represented by the black arrows. If a bigger move were to occur it’s very possible that, like in Jan-Feb and Oct last year, a pause may take place after the completion of the black range before continuing up. The daily RSI is suggestive of higher levels to come with its positive divergence and a clear line in the sand just above the 50 line.

EUR/JPY hourly might look a bit messy but the MAs, colour zone, uptrend channel and higher ranging hourly RSI all point to an uptrend – an uptrend that looks to be continuing. The first warning sign will be an RSI out of the red box below 30 to show weakness rather than oversold, just as in late July the move over 70 signalled new strength and a shift in range. So this is a buy I’d rather buy than sell, but I’d need a lower level to get in.

GBP/JPY daily has also completed its small range at prior resistance. It has a few bigger moves up its sleeve but it does love the aqua coloured down moves too. RSI is at similar level to the black moves in Oct and Jan after which price continued up.

On the GBP/JPY hourly we see higher lows and a break, backtest and hold of 124, a green colour zone and a higher ranging hourly RSI. I’ve omitted MAs because they haven’t been useful for the past few monts. At current levels this may be the first BUY for the week with 124 your risk level.

10c

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