Happy new year!
I know it’s going to take me at least a few weeks to get used to ending my dates with 17 rather than 16, so bear with me!
Now in itself, this doesn’t really mean much. I’m never one to be blindly selling resistance or buying support. Of course markets don’t work like this and you’re just asking to get yourself on the wrong side of a momentum move with horrible risk:reward if you’re not refining your entries better than this.
It just so happens that as I’m writing this and the markets are opening for the shortened, still no doubt holiday affected week, the US Dollar is showing strength across the board and rising in most of the major pairs. This initial strength is certainly worth taking note of with the USDX at resistance like this.
One such in play major forex pair is USD/JPY, with price hovering precariously around the higher time frame support/resistance level we can see on the chart below.
Now we’ve already traded this USD/JPY level from the short side and like clockwork, here we are back again after reactivating it from the long side.
If the USDX triple top resistance level does in fact look like breaking, we have an opportunity to zoom into an intraday USD/JPY chart and look for entries at short term resistance that might turn into support to give us the confirmation and excellent risk:reward that we’re looking for.
Somewhere down in this region?
Keep an eye on the @VantageFX Twitter account and this blog as the setup unfolds.
Do you see opportunity trading USD/JPY in conjunction with USDX? Open a forex account with the best Australian forex broker, Vantage FX and start using the USDX in your trading.
Dane Williams – @VantageFX
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