Good afternoon team,
We are coming into a busy economic night with the US non farm payroll, unemployment data and average hourly earnings reports.
Market sentiment has been very much risk on this week with US equities continuing to move further into the green. Furthermore, there has been numerous green economic data points from Australia, the EU and the US over the past week.
We are waiting on the latest announcement from the White House regarding the next covid-19 stimulus package, news from Washington suggests Trump will likely act on his own and extend the unemployment benefits if the Republicans and Democrats do not reach an agreement prior to the weekend.
Looking across the board, the EURUSD, AUDUSD and GBPUSD are all overbought printing bearish divergences on the 4 hour and daily time frame. This suggests the bulls momentum is running out of steam and reversals could be setting up in the market.
We are looking to position on the USDJPY now leading into the US data releases.
We have seen a break of a negative trend line followed by a retest of the new support zone at 105.35. There has potentially been a bull flag breakout suggesting further upside.
Trade Setup: BUY Market Execution, current price 105.55, stop loss 104.80 and take profit left to run but targeting the 107.10-107.40 levels.
Stop loss: 75 pips
Take profit: 155-182 pips