$USDJPY – Consolidation Coming?

By: Blake Morrow

I am not a big fan of trying to step in front of a big move, but always on the lookout of trying to find a period of consolidation and look for a setup for a continuation trade back in the direction of the trend.

In regards of the USD/JPY, a few weeks ago I noticed a bigger move brewing, and now I am asking myself if this is the near term top of the move. If you look at this chart below, you can see as of Friday we have peaked in the 88.50 level and now we look like we could be in a period of a slight pullback/consolidation.

Blake_YEN1

For me to stay bullish, this pair should remain above the 84.00 level, anything below that and the risks of a move back into the longer term trend is heightened.

Blake_YEN2

But keep in mind the longer term chart of the JPY continuous contracts, there is still room to run “lower” in the medium term. But according to longer term RSI, we are oversold. More than likely, those conditions will have to be worked off soon.

Blake_YEN3

Blake Morrow

Follow me on StockTwits or Twitter @PipCzar

Disclaimer: I have no positions in the USD/JPY, but may in the next 72 hours

About Nickolas Pirraglia

Nick Pirraglia started his career in trading in 1991 after returning to the US as an Army Officer deployed in Iraq. He began as a bond broker and worked his way into trading. Expert mentoring, hard work and a disciplined approach to the markets has allowed Nick the ability to maintain a very successful career in Capital Markets and Trading for over 20 years as a professional OTC Market Maker and independent trader. Nick has also managed the trading desks for a two Dallas based capital management companies and traded equities for a Dallas based hedge fund. Nick has trained and mentored thousands of customers in the rigors of trading, technical analysis and risk controls. Recently, Nick had broadened his market experience through the design and product management of two automated trading platforms. He has the pleasure of working with some of the brightest minds in the trading community and has collaborated with experts in data, design, engineering and trading psychology. An avid long distance runner, Nick completed several marathon events, qualified for the Boston marathon, completed several long distance Triathlons to include finishing a full Ironman triathlon.
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