Trading the trend: long USD/JPY
Since USD/JPY might have ended its Elliott wave ABC correction at this week’s ¥146.23 low and since a Harami buy signal has been given, we would like to buy USD/JPY with a stop loss at ¥146.20.
(Video Transcript)
Robusta coffee trade made a small loss
Good morning and welcome to this week's trading the trend on Wednesday 6 December 2023. Last week, we went short coffee Robusta for technical reasons as we headed towards key resistance and we're seeing a reversal to the downside on the daily chart. And you can see that here on this chart.
But since then, unfortunately, we did get stopped out because we had a daily chart close above the October high above which we placed our stop loss. So that trade basically got us a small loss. And this happens, obviously, when you trade.
The important thing is to make sure that you have small losses on average and higher, bigger gains in order to make money over time.
Sarami pattern is a short-term signal to buy
Now, what I would like to do for this week is to go long US dollar/Japanese yen, as you can see here in this long term uptrend in dollar yen and dollar yen could be in the process of forming what is called an ABC edit wave correction.
But irrespective of that, we also have here the Sarami pattern, which we formed yesterday on the daily chart. And today we're breaking out of it to the upside.
Long USD/JP with a small risk
So, for me, that's a short-term buy signal. And we can go long USD/JPY with a relatively small risk with a stop loss being placed below the current December low and a potential upside target, which is two or three times greater.
And this is what we try to do to get the odds in our favour and then also to basically have a reward to risk ratio, which is in our favour. So, this week's trading the trend is to buy dollar yen and put a stop loss below the December low at around 146.20, with an upside target of between 150 and 151.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
