SHARP RALLY IN YEN PAIRS - TRADING GAINS AHEAD

The major crosses for the Japanese Yen have rallied sharply in the last few days, with gains of between 500 and 1000 Pips seen for the USD, EURO, GBP and the CHF. Although some of these have started to pullback, the setups on their respective Daily Charts suggest that this could be temporary ahead of further losses for the Japanese Yen.

The USD JPY led the way with a strong breakout from a Range setup on August 20.


DAILY CHART- RANGE SETUP



















DAILY CHART- BREAKOUT


















The GBP JPY followed with a breakout of its own of over 1000 Pips from a Pennant setup.



DAILY CHART- PENNANT SETUP
















 

DAILY CHART- BREAKOUT















 


In breaking the Resistance of this Pennant, however, the pair exceeded its Monthly Range (see Trading Manual). This means that it is expected to pullback or move sideways for awhile before resuming the uptrend. As long as the bullish signal given after this pause is strong and clear, traders will be able to capture between 100 and 200 Pips.

The EURO JPY also started to break out of its large Pennant with a move of 500 Pips. It did this with a breakout from a small Range at the Support  and has now pulled back to the Resistance of the Pennant. The reason for the pullback has to do with the Breakout Equivalent (B.E.) of this Range being hit which is the target that all breakouts from Consolidations go towards before they pause to either resume the trend or reverse.


DAILY CHART- PENNANT & UPTREND



















DAILY CHART- BREAKOUT & BREAKOUT EQUIVALENT


 














 



If the breakout is going to continue in favour of the EURO, we will have to see a strong U-turn and bullish signal following this test of the Resistance. It is then likely to start a trend that takes us back to the high of 145,67 set on December 27, 2013.

Breakout Equivalent and Monthly Range targets are important technical price points to take into consideration when trading the Daily Chart. They act as strong profit targets for our trades as well as major pullback points for all the Currency Pairs in the Forex. An awareness of these areas greatly enhances your profitability as you anticipate sharp reversals in the market and identify the best exit points for your trades.


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Duane Shepherd 
(M.Sc. Economics, B.Sc. Management and Economics)
Currency Analyst/Trader
Contact: shepherdduane@gmail.com
Twitter: @WorldWide876
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