USDJPY: long-term picture
Updated
I would like to long "USDJPY" because the price is likely to make new high after correction.
After second half of the year, I will change my strategy from long to short.
Analysis:
1) Price is moving in wave {B}-(C)-3.
2) Price shows alternation between subwaves 2 and 4.
- subwave 2: sharp correction (more than 78.6% retracement of subwave 1)
- subwave 4: sideways correction (at least 23.6% retracement of subwave 3)
3) 14-day slow stochastic oscillator shows positive correlation with the price action.
- Crossing back above the oversold 20 line can be used as a buy signal.
4) Price is above the cloud. The picture is still bullish. Thicker cloud should provide great support.
5) 23.6%-38.2% retracement level looks like a good buy zone.
6) 2.618 extension level: (C)=2.618(A) looks like a reasonable upside target.
- It also lines up with 2016 high when BOJ decided negative interest rate policy.
Let's see how it goes!
After second half of the year, I will change my strategy from long to short.
Analysis:
1) Price is moving in wave {B}-(C)-3.
2) Price shows alternation between subwaves 2 and 4.
- subwave 2: sharp correction (more than 78.6% retracement of subwave 1)
- subwave 4: sideways correction (at least 23.6% retracement of subwave 3)
3) 14-day slow stochastic oscillator shows positive correlation with the price action.
- Crossing back above the oversold 20 line can be used as a buy signal.
4) Price is above the cloud. The picture is still bullish. Thicker cloud should provide great support.
5) 23.6%-38.2% retracement level looks like a good buy zone.
6) 2.618 extension level: (C)=2.618(A) looks like a reasonable upside target.
- It also lines up with 2016 high when BOJ decided negative interest rate policy.
Let's see how it goes!
Note
Weekly chart:Note
Today's and yesterday's simple moving average of previous n bars:MA(0) = {P(0) + P(1) + ... + P(n-2) + P(n-1)}/n
MA(1) = {P(1) + P(2) + ... + P(n-1) + P(n)}/n
Subtraction:
MA(0) - MA(1) = {P(0) - P(n)}/n
From MA(0) - MA(1) = {MA(0) - MA(1)}/1,
MA(0) - MA(1) can be regarded as the slope of tangent line.
Definition of Momentum:
Mom(0) = P(0) - P(n)
Conclusion:
Momentum is proportionate to the gradient of simple moving average.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.