Top Trade Idea For July 31st, 2014 – USDJPY
By Mircea Vasiu on Jul 31, 2014 09:17:56 GMT
Bullish break for the usdjpy pair as it is benefiting from better than expected US data (from a fundamental point of view) and a contracting triangle that broke higher (from a technical point of view).
The fact that this contracting triangle is on the daily chart should be taken seriously as the b-d trend line is broken in less than the time taken for the e wave to form and this is vital for a real break.
Therefore, the 107 target to the upside comes only from the measured move of a triangle, or the so colled thrust, and nothing else.
The pair should be supported on dips and the 101 lows should hold now. Usually such a trend line like the b-d in the chart above is retested, though this is not mandatory.
A contracting triangle acts as either a continuation pattern, or a reversal pattern. In our situation it is acting as a continuation pattern and I would say breaking previous highs is only a matter or time.
But again, this is daily chart so patience is required, especially when considering summer trading conditions.
About Mircea Vasiu
Mircea Vasiu has an MBA in International Business from an American University, graduating Magna Cum Laudae. He has been a professional trader for the last 8 years and is involved in various educational projects for different financial companies. He also runs a trading signal for the currency markets at www.capitalpropertiesfx.com.
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