FX.co ★ USD/JPY Technical Analysis and Trading Recommendations for Mach 8, 2012

4H

General situation:
Analyzing the USD/JPY pair exchange rate for March 8 we can define exactly the reasons that forced the Ichimoku to provide the signal for Buy-deals. This signal is considered as weak and confirmed as Chinkou Span is located below the price chart and the price remains higher than the Ichimoku Cloud. Thus, the downside targets are seen at the second support level 79.37, though it is recommended to begin trading when the price will be fixed below the Ichimoku Cloud. In case this resistance level is passed though, the next target will be seen at the third resistance level 78.73. The ascending movement remains the same, as long as the price is located higher than the Kijun-Sen (81.20). In case the price is located higher than this point, the further elaboration of the signal for Sell-deals will be questioned resulting in possible reversal of price to upwards. Chinkou Span is located lower than the price chart confirming the current signal for Sell-deals and indicating the bearish mood at the USD/JPY market. Bollinger Bands indicates the descending movement, lines are expanded and directed downwards, that is why Sell-orders are considered relevant. MACD is directed downwards indicating the current upward movement. That is the reason why the indicator prevents from entering the market with short positions. Therefore, it is necessary to wait when the price is fixed below the Ichimoku Cloud.

Trading recommendations:
As to USD/JPY pair market, it is recommended to consider the Sell-positions with target seen at the level 79.37. In case this level is passed through, the next target will be seen at the level 78.73. Stop Loss is to be placed above the point 81.20. When opening the short positions, MACD is expected to indicate the downside movement. When the price passes 30-40 pips to the required side, the Stop Loss can be placed to a non-loss area. Take profits can be placed at levels 79.45 and 78.80.

Apart from the technical picture it is necessary to consider the fundamental data and the time of its release.

Explanations to the picture:
Ichimoku Indicator:
Tenkan-Sen – red line
Kijun-Sen – blue line
Senkou Span A – light brown dotted line
Senkou Span B – light blue dotted line
Chinkou Span – green line
Senkou Span B – violet dotted line
Bollinger Bands:
3 yellow lines
MACD Indicator:
Red line and the histogram with white bars in the indicators window.