Good afternoon team,
Finally, a nice move on the USD as expected. Gold broke down from the pennant formation and we will be looking to trade once an entry point is met.
Risk concerns are coming back into the forefront of the news as corona-virus cases increase across Europe and the UK. We are looking at second lockdown measaures coming into play, which will result in a higher demand for USD. Additinaly, a negative tone was taken by the FED Chairman Jerome Powell over night, which also added fuel on the USD safe haven rally.
Whilst the JPY is strong across the board, there is a technical pattern setting up on the USDJPY that is of interest.
USDJPY – Daily Charts
Double bottom formation with an indecision candle.
USDJPY 1 Hour Charts
Broken negative channel formation. The market has retraced to the key 61% FIB retracement zone. There is also a potential inverted head and shoulders formation in play.
Trade Setup: BUY Market Execution, current price 104.53, stop loss 104.13 and take profit targets 105.10-105.40
Stop loss: 40 pips
Take profit: 57-87 pips