Technical Analysis USDJPY : 2014-06-19

Good afternoon, dear traders. Today in the evening (14:30, CET) we expect the publication of the Unemployment Claims over the past week. These data are collected by the Ministry of Labor, and published in the weekly report. The indicator allows us to estimate the domestic demand dynamics, as well as the potential consumer lending to stimulate the U.S. economy. If the actual value is above the forecast of 316 thousand applications, we should expect the U.S. currency weakening.

Here we consider the currency pair USD/JPY on the H4 chart. The price moves within the daily bearish trend, and broke through the H4 downwards. It happened after the formation of the "balance" candlestick pattern. This pattern is marked with yellow on the chart and indicates the completion of a short-term correction. The ParabolicSAR trend indicator turned up before crossing the PivotPoints signal line. It is worth mentioning the RSI consistency: the uptrend breakthrough is duplicated by the RSI-Bars oscillator. That allows us to talk with confidence about the continuation of the downtrend.

Pending sell order is to be preliminary placed below the key fractal minimum at 101.705. This level is confirmed by the PivotPoints historical support. Stop Loss can be chosen at the last fractal high at 102.344, which coincides with the historical value of the ParabolicSAR indicator and the first PivotPoints support. Opening a position, it is recommended to move the Stop loss after the parabolic values every 4 hours after the order execution. Thus, we can optimize the return/risk ratio in our favor in the process of changing market conditions. Conservative traders can partially close the position at 101.439. If you decide to take a break from the market, the automatic Trailing Stop can be placed, taking the distance between the two previous fractal peaks into account. This distance is indicated by the double arrow on the chart above.

Position openingbelow 101.705
Stop loss above 102.344


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