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You have seen me post my charts with red and blue lines forming patterns. This is the Amazing Trader charting algo. Let me show you how it all began and then evolved in
Trade like a pro
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Trade like a Pro – 8-STEP CHECKLIST TO DETERMINE IF YOU’RE TREATING TRADING LIKE A BUSINESS
Trade like a Pro – 8 STEP CHECKLIST TO DETERMINE IF YOU’RE TREATING TRADING LIKE A BUSINESS
USDJPY WEEKLY CHART – UPTREND SINCE THE START OF 2023
USDJPY has been in a weekly uptrend since the start of 2023, which elevates the importance of its weekly trendline. There is already a 10% range from the low to the high this yeasr
Where is the risk?
While the techincal risk is still pointed up (note the trendline), the volatility risk is if the currency reverses to the downside. However, betting on intervention or other policy moves to reverse the trend is expensive given the cost of a rollover being long JPY, pitting those trading on hope vs. those trading on fundamentals.
To keep it simple,
152.92 = 50% of this year’s range and 151.91 is last year’s high.
To make it even simpler, USDJPY trades with support as long as it stays above 155 and only sub-150 trade would suggest the high is in.
On the upside, levels are clear
158.00 and 160.16
This suggests 158-160 would be the intervention alert zone.
I haven’t mentioned JPY crosses, where there is less chance of intervention.
EURUSD WEEKLY CHART – INSIDE YEAR
I remember when central banks used to look at 10 big figure ranges, such as EURUSD 1.00-1.10, 1.05-1.15. 1.10-1.20
Looking at this weekly chart not only is the range less than 10 big figures but is also so far an inside year.
Taking it one step further, 50% of the 2023 range is 1.0860 vs Friday’s close around 1.0845
Compare that with USDJPY and you can see why the EURUSD has been better suited for short-term trends rather than betting on longer-term trends and breakouts.
This does not mean it will not trade like this forever but at least it puts the price action in perspective.
So without fine-tuning, you can either use 1.0860 (I prefer 1.0850, which is close enough) to set its tone for day trading while within 1.08-1.09, a range too tight to last,.
Fed’s preferred inflation indicator (PCE) will likely show that disinflation stalled in April
Eurozone inflation is forecast to have increased in May but the move up is seen as atemporary.
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