Forex Trading Strategy Update

April 2, 2014 with Vito Henjoto

Hey everyone, this is Vito Henjoto, Senior Technical Strategist at Invast

Financial Services. Today is the 2nd of April 2014.

Another day another look at the currency front. Let’’s take a quick look at

the AUD/USD. Yesterday, we were kind of expecting AUD/USD to break

out of that range where 93 was resistance and 9225 for support. We

managed to take a small peak, slightly above the 93, but obviously we see

a strong sell off immediately after that happens. That has continued to put

pressure on the AUD/USD. Right now, prices kind of trading towards the

lower end of the bend here. Again, we prefer to wait for price to get out of

this range unless you are really a short term trader and you prefer trading

intraday within these two levels here, the 75 pip range. We much prefer to

wait for price to manage to just break above 93 confidently or below 9225

on the hourly time frame here before we decide to put on any positions on

the AUD/USD.

The Ichimoku again is indicating a potential of more from sideways market

condition here as you can see the change. The Ichimoku here, it just

moves back and forth right now because it’s again trading below the

Ichimoku Cloud, but resistance or the key pivot level basically hovers

around 9255 level here. That’’s likely going to stay as long as prices are

going to be trading between these two bands here.

Divergence wise, there’’s no clear divergence set on the hourly time frame

for the AUD/USD. I do want to point out though, if you go into the daily

time frame, how the AUD/USD is likely going become overbought very,

very soon. We are just waiting AUD level to comeback down. We kind of

estimating price managed to drop down back down below 92 cents then

there’’s a high chance it’ll actually correct itself even lower. Do keep a

close eye on the AUD/USD here. Again, Intraday wise or short term time

frame, we’’re looking for more definite trend direction here compared to the

range bound market condition where the AUD/USD is currently traded in.

So that�’s the AUD/USD.

This week, I do really want to focus more on the JPY side of things. Let’’s

take a look at the EUR/JPY, AUD/JPY and the USD/JPY. The reason why

we want to talk about this is that Japan just raised its consumption tax. I

believe it was from 3 percent to 8 percent and the [Indiscernible] survey

wasn�’t that great yesterday, but it’’s not going to stop economics at this

point in time. I think the Bank of Japan i’s not going to hold back on their

aggressive policy here just because those numbers are dropping. Take a

look at the EUR/JPY here. We have seen a lot of weakness on the JPY

front, and that’’s likely going to be a trend that’s going to continue to go

forward here. So EUR/JPY we can see very clearly the up trends really,

really strong concentrating above the Ichimoku cloud This is on the hourly

timeframe here and take a look at the [Indiscernible], both of them are still

pushing up really high right now. We do expect a little bit of a pull back

right now. Price is just basically right here on the 143 level mark there, and

it�’s also very close to 161.8 percent Fibonacci extension.

That’s coming at 143.11 so price is likely going to be pulling back a little

bit, and instead of shorting the EUR/JPY, I much prefer looking for a buy

back once price corrected itself. Currently we’re looking at potential return

towards 50 percent here about 142.50, level there. You can see why I

really want to get a buy back around this level. This is where the

[Indiscernible] is located, also previous resistance level on the EUR/JPY. If

price manages to bounce off from 142.50, then I much prefer to buy back

on the [Indiscernible] EUR/JPY. Target to the upside for the EUR/JPY ---

we have 144 -145 as potential target to the upside, but I’’ll update that as

soon as we get further confirmation. We’re likely going to get this probably

tonight during the live market analysis session. So, if you are interested in

joining those go to our website and register for it.

Next one I want to bring up is the AUD/JPY. We do again look for a little

bit of a pullback here. We have 96 as a key resistance here on the

AUD/JPY, and that’’s likely going to cap the market from progressing even

further at this point in time. We’’re looking for a little bit of a pullback

potentially towards 9450 level here, and that�’s basically where the

previous resistance level is located. We also have two support trend lines

here holding off the AUD/JPY. We are going to be seeing a little bit more

support on the AUD/JPY again, so 9450 is the preferred level to look for

potential bounce, and again, seems narrow with the EUR/JPY. We much

prefer going long once it manages to pullback a little bit.

On the USD/JPY, I need to point out today and yesterday as well, we

talked about how the USD/JPY managed to close consistently above 103.

It really pushed up a little bit higher. We do have a little bit of resistance,

and this is actually the level we talked about yesterday as well on the

USD/JPY. I think it was on the four hour time frame I believe. We’re

basically going to be looking at this previous resistance level here. That’’s

basically so about 103.75 level. That’’s going be the key resistance to

watch out for. We haven’’t touched that level yet. We do expect a little bit of

resistance from that point and we might see a little bit of a pullback to

downside for the USD/JPY.

We haven’’t seen any strong confirmation of a potential drop down yet or

correction. Assuming that it’’s going to be correcting itself right here at the

103.75, you can use this as kind of like a guidance on how far down it can

correct itself to. First of all we have 103.25 and then 103 itself, so basically

between 23.6 and 38.2 percent Fibonacci retracement there. I�’m going to

get rid of that, I’’m going to highlight this. So, 103.25 and 103, that’’s going

to be the first support level there that we a’re going to be keeping a close

eye for. If it does break below that, then the next key level is going to be at

102.75, which is right over here.

So again, same scenario with the AUD/JPY and the EUR/JPY for the

USD/JPY. We’’re looking for a level of a pullback and we must prefer going

long once that pullback has been completed. I think that’’s a lot more

weakness for the JPY here against the [Indiscernible] process. We’’ll see

what happens there.

Again a reminder that tonight’’s going to be live trading analysis session.

We�’re doing a webinar that’’s at 7p.m. Sydney time. If you’’re interested and

you haven’t already gotten yourself registered for it, got to our website

invast.com.au and you can find the registration under resources -

webinars. Hopefully I’ll catch some of you guys here. Otherwise, have a

great fantastic trading day ahead.