Learn how to create trading plans from a currency broker training｜Episode 24: Incorporating the idea of three waves into USD/JPY market analysis⑰ [Toshiro Asano]
Toshio Asano Profile
Having worked at Tokyo Short Group's foreign exchange brokerage, Tokyo Forex Co., Ltd., and at EBS (now ICAP), which boasted over 80% global market share in currency trading, he has firsthand experience with historic markets such as the 1985 Plaza Accord, the subsequent era of a super strong yen, the bubble burst, and the 2000 euro consolidation, developing his market sense. He later founded two FX trading companies and worked as a dealer for a private FX fund. Currently, he writes for the daily blog in the Investment School Group. His skill in video editing also earns him many supporters of easy-to-understand video works.
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※This article is a reprint/edited version of an article from FX Strategy.com, April 2019. Please note that the market information described in the body is not current market information.
In this project, Mr. Asano shares his buy/sell methods and market sense-building know-how backed by his own experience and knowledge without reservation. This time as well, please analysis the latest and future USD/JPY trends and propose the most suitable trading plan.
Beginning of the Year Clouded by Turbulence; Recovery Will Take Time
In 2019, on January 3, a surge of yen buying, associated with yen-pair trades, caused a flash crash where the 105 yen level was breached within minutes. There were even rumors of quotes in the 103 yen range, making it a tumultuous start. In the previous issue, we noted that the chart position was not favorable and suggested waiting, which was a decent takeaway.
Regarding the dollar and the yen, the interest rate differential is not likely to shrink easily, so there remains strong latent dollar-buying pressure. However, the price movement on the 3rd completely shattered the market, and recovery will require some time. Now, before the first analysis of the year, let us first address this chart correction.
Since the 2018 low M, there had been a sequence of minor pullbacks as it rose, but the January crash wiped out those pullbacks. Therefore, we replace the previously labeled high as R with N, and designate the January low as O. Since Q–R mid no longer has meaning, it is removed; J–M mid is thickened again and turned into resistance (blue). It briefly broke below, but at present, the support I–J mid has been revived in orange. Now, we will immediately proceed with a weekly analysis.
