03 November 2015, USD/JPY
USDJPY is currently trading with a bearish bias. During the previous intraday while GBPUSD gapped up, USDJPY gapped down to 120.37. Following the gap down, the price moved up but could not close above 121.096. Although we expect further upward movement as long as the price trades above 120.59 but with stops at 121.039, and the next stop at 121.47. We choose to remain short in this pair in the short run since almost all the intraday indicators are giving sell signal in the higher timeframes. Traders trading this pair should also observe other pairs such as HKD/JPY for positive correlation. These have a strong positive correlation of up to +.0.98 and are thus expected to move in a similar direction. Only buy or sell USD/JPY if all the other positively correlated pairs are giving the same signal.
Remain short in the pair but with stops at 120.56, and the next stop at 120.26. In an alternative case scenario, should the pair close above 121.024, then long positions will be ideal for trading.
Support Levels: S3: 120.3483 S2: 120.4917 S1: 120.5733 Pivot: PP: 120.67 Resistance Levels: R1: 120.7983 R2: 120.9417 R3: 121.0233