[Sept 18 (Wed)] Analysis of USD/JPY Pound-Yen price action and trading strategy
Hello, this is Kinugasa.
As announced recently on Twitter, starting today I will update a daily pound/yen trading strategy.
This trading strategy reflects Kinugasa's own ideas and does not guarantee profits. Please understand that if you trade based on it and incur losses, Kinugasa cannot provide any compensation.
Also, the analysis is based on the Span A/B model and the Super Bollinger.
Detailed explanations are in the articles below, so please take a look if you like.
Now, let's take a look right away!
9/18 (Wed) Pound/Yen Strategy
Daily chart
First, the daily chart for the pound/yen.
The Lagging Span is bullish, and the cloud color signals a buy.
Clearly, a buy-side advantage is visible.
The body of the candlestick is moving between the 2σ and 1σ bounds of the BB (Bollinger Bands).
It has moved a little too far from 1σ, so there might be a pullback down to 1σ for the time being.
From the daily chart, two strategies can be considered.
① Breakout expectation long when the previous high is updated.
② Buy on pullbacks.
Here, I think option ① is not very advantageous.
Even if it breaks above the previous high, there are several resistance levels above that could push it back down, so it may not hold easily.
Therefore the basic pound/yen strategy is to aim for the pullback buy (②).
Let's search for that level on lower time frames.
〇 4-hour chart
The 4-hour chart also shows a buying bias.
In response to the overall rise, a Fibonacci retracement was drawn.
Then,the 23.6% level at 133.331 coincides with the lower boundary of the Span model cloudas the location.
This means that if support at 133.331 is confirmed, holding a long position is a viable strategy.
Conversely, if 133.331 clearly breaks, the pullback-buy strategy itself may need reconsideration.
〇 1-hour chart
Let's also look at the 1-hour chart.
This also shows a buying bias, but a pullback seems likely for now. Of course, it could continue to make new highs and break out...
Now, 133.331 on the 1-hour chart overlaps with -3σ.
This suggests that at present, it may not pull back to this level easily.
Realistically, a long entry at touch of -2σ seems reasonable.
With all of the above in mind, here are concrete trading strategies.
① On the daily and 4-hour charts, look for a trend-following setup, with the 1-hour chart targeting a contrarian entry.
② Long entry on touch of -2σ on the 1-hour chart.
③ If the trade moves in our favor, take profit on touch of +1σ or +2σ on the 1-hour chart.
④ final stop-loss line is the break of 133.331.In other words, if in the near term 133.331 is approached, adding to the position or averaging down is allowed (but if it breaks, always cut losses).
That’s all for today’s pound/yen strategy!
