10 August 2016, USD/JPY
USD/JPY is currently trading with a bearish bias. Yesterday, the pair entered into a rectangular formation not going above 102.58 or below 100.73. We are waiting for a clear breakout below the rectangle to go short while a breakout above it will call for long positions. However, as long as the pair trade within the rectangle, we will only be keen to trade reveals from either key levels, 102.58 and 100.73. This pair should be traded alongside GBP/JPY, CAD/JPY, NZD/JPY and AUD/JPY. These pairs have a strong positive correlation of up to +0.86 and will have a similar price action duing this intraday.
As long as the pair trades within the rectangle, trade reversals. A clear breakout below 100.73 will call for short positions with an ideal target at 99.033 while a clear breakout above 102.58 will mean looking for long positions with an ideal target at 104.24.