Top Trade Idea For November 4th, 2014 – USD/JPY
By Gregor Horvat on Nov 4, 2014 01:43:16 GMT
Good day to everyone!
In today’s article we will take a look at the most interesting pair of the past few day, which should be USDJPY that broke to new highs of the year, slightly above 114 so far, after the FED ended the QE program last week. At the same time we also see stocks at the highs with room for 2030/2040 on S&P500 which could help to support USDJPY even more as markets are in positive correlation.
On USDJPY 4h chart we see a nice move up from 105.18. This is a strong move as you can see so it must be an impulse. And we said several times in the past that impulses are five wave patterns, so when it comes to trading you need to ask yourself; »Is this bullish rally near completion with its five wave move, or is there room for more!?” Well, we cannot count five waves as completed yet from 105.18, which means that USDJPY will probably stay in bullish mode. The next thing is that we always want to stay with a trend when applying the wave count on the price chart. And we also want to trade in this direction.
Before looking for an entry point you want a correction, to get in at »better« in our case lower price. Well, there was some minor reversal from above 114 in the last couple of sessions so we suspect that fourth wave is unfolding. We are talking about blue wave (iv) that can retrace even back to 112.40 to fill the Sunday gap before market turns up for 115. Keep in mind that those gaps can turn into a reversal zone, like many times before.
Trade can be as follows.
Long USDJPY at 112.50
# Move stops to entry when 1:1 risk-reward is achieved
# Cancel trade if new highs will be seen before 112.50 entry point
Interested in our analysis? Get now first 2 months @ price of 1 >> http://www.ew-forecast.com/service
About Gregor Horvat
Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/ TryEW-Forecast.com’s Services For 14 Days for just €1 at http://www.ew-forecast.com/service .
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