Inside the Currency Market: Trade Recommendation # 16 USD/JPY

USD/JPY currently sits at 81.21 and is seriously overbought at these levels from all longer and intermediate term levels. The current EU levels reveal nothing in terms of future direction except for shorter term 5 and 10 day averages that will correct from 1.2800 to 1.2755 with a Mathematical Stop, my benchmark at 1.2760. So to look at USD/JPY for a EU view reveals EU appears to be heading higher which will support and resolve my 1.2850 long trade with either a profit or breakeven. I suspect profit is ahead due to the 135 pip downtrend that I see currently in USD/JPY.

I'm not and never was a huge fan of USD/JPY straightforward at present because the JPY is not the pair it once was. At 125, the Yen was okay to swing 200 pips anytime without worry. At 76, its the line in the sand for the BOJ as lower levels for USD/JPY is a national security concern rather than a market price document. I always fear BOJ intervention at lower levels. But the case here for quick gains is too convincing due to the serious overbought price at current levels.

So Sell USD/JPY at 81.21 Target 80.56, + 65 pips. Longer term traders may want to remain to 79.83 for + 135. Mathematical Stops 81.12, 80.32, 79.86, 79.83. This pair is seriously overbought and must correct so be patient for those that wish to stay in longer. Any price rises can confidently be sold to achieve targets.

I'm Brian Twomey, Inside the Currency Market

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Comment by john richmond on November 19, 2012 at 11:47pm: nice forecast and analysis. thanks

Comment by Peter jcp on November 20, 2012 at 7:05am: Hi Grigore - I am sure Brian will answer your question in more detail etc - but basically his mathematical system of standard deviation of a group of MA''s along with statistics/ probabilities works out a direction and a price area the pair should go to. That is the same in many senses as when a currency pair is OB/ OS and then what happens - ie a change in direction - so that an equilibrium is found again.

So in conclusion - No, Brian has not changed his system - prices moves for so many reasons and if you can link all the reasons together and come up with an extra strong reason- then the probability and success will be higher.

Hope that explains from how i see it.

Have a good week

Regards

Peter

Comment by Brian Twomey on November 20, 2012 at 8:27am: Hi Grigore, My mathematical system says sell USD/JPY to 79.38 for + 135, I'm going to 80.56 for + 65. I used the term overbought, its an understatement for this pair

Comment by Serg Шеховцов on November 20, 2012 at 12:04pm: Who knows the statistics: 1......15 targets - the maximum minus on each target?

Comment by Brian Twomey on November 20, 2012 at 12:32pm: Considering 1 aspect of my overall system introduced, entries overall were statistically good, a few misses yet all targets hit exactly which says a miss on entry add to positons to target for additional gains. GJ was a miss but add to position led to not 58 pips but 220 pips on 2 lots.

Comment by Jason on November 20, 2012 at 1:08pm: Hi sir. I am on line for a while and read with interest your nzd jpy sell. The nzd jpy seem to exhibit the same situation as the gbpjpy previously. So do you have any update on this open trade situation?
Many thanks sir

Comment by Deb Roy on November 20, 2012 at 2:28pm: Hi Brian, In general I have noticed one thing common with most of your trades and that is the pair goes into the opposite direction to your trade recommendation for quite a while before taking a turn in your favour. There are quite a few examples for this, EUR-USD, NZD-JPY etc. And for that matter one has to have a significant amount of Stop Loss in place. Is there any way that you could recommend to reduce the risk for a particular trade??

Regards

Comment by Al on November 20, 2012 at 2:38pm: Hello Mr Brian

I am not sure I got it right. You say any price rise can confidently be sold to achieve target I believe, Do You refer to this USD/JPY that at moment seems heading further north or any pairs that You analyze? I am new Sir and following You Thanks Al

Comment by Sana Ullah Rajpoot on November 20, 2012 at 2:44pm: hi brain how r U

my qusetion about UJ is that how much it can rise more do u c it fallling i am stuck in trade at 81.30 its aa sell plz Guide me thanks