USD JPY SET FOR SHARP BREAKOUT ~ no risk forex trading system
The pair is currently hovering above the Resistance of this Pennant, which was formed following that sharp breakout that started in October of 2014. Pennants and Ranges, which are setups that reflect low levels of liquidity, are usually formed after these aggressive market movements.
DAILY CHART - PENNANT SETUP
This current Pennant setup is taking place within the context of a strong uptrend, which would provide added momentum for a Bullish Breakout.
DAILY CHART - UPTREND LINES
Taking a closer look at the Pennant, we can see that there has been a temporary breakout above Resistance that was quickly met by a bearish pullback. This has led to the formation of a Counter Trend Line (CTL) setup which, if broken by a strong enough Bullish Candle, will be the signal for us to start buying US Dollars.
DAILY CHART - COUNTER TREND LINE
On the other hand, this pullback could also be the start of a move that carries us back down to the Support boundary.
DAILY CHART- BEARISH REVERSAL?
This would either followed by another rally back to Resistance or a breakout below Support to the Inner Uptrend Line.
TRADE DECISIONS
If a Bullish Candle forms above the CTL convincingly and confirms to our rules for Normal Candles, going long will be a strong possibility. If the bearish move were to continue towards Support instead, trading this may too risky given the small distance to this boundary. However, if a suitable bearish candle starts the breakout towards the Inner Uptrend Line, then this will be analyzed for a short trade.
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Duane Shepherd
(M.Sc. Economics, B.Sc. Management and Economics)
Currency Analyst/Trader
Contact: shepherdduane@gmail.com
Twitter: @WorldWide876
Facebook: DRFXTRADING
Website: www.drfxswingtrading.com
Website: www.drfxswingtrading.com
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