Learn How to Create Buy/Sell Plans from a Currency Exchange Broker | Episode 14: Incorporating the Idea of the Three Waves into USD/JPY Market Analysis ⑦ [Toshiro Asano]
Mr. Toshio Asano will thoroughly teach his trading methods and market-building know-how backed by his own experience and knowledge, in this project. This time as well, please analyze the recent and future USD/JPY market and, based on that, present the most suitable buy/sell plan.
※This article is a reprint and revision of FX攻略.com June 2018 issue. Please note that the market information written in the main text may differ from the current market.
Toshio Asano Profile
Asano, Toshiro. He has worked at Tokyo Forex Co., Ltd., a foreign exchange brokerage of the TOUKAN Group, and at EBS (now ICAP), which boasted over 80% of the global market share in currency trading. He has firsthand experience with historic markets such as the 1985 Plaza Accord, the subsequent era of extreme yen appreciation, the bursting of the bubble, and the euro integration in 2000, which helped him develop his market sense. Afterwards, he founded two FX trading companies and also worked as a trader for private FX funds. Currently, he writes for the daily blog of the Investment School Group. He is also a strong advocate of easy-to-understand video works leveraging his skill in video editing.
Movements that differ from the premise of a breakout
In the last issue, we touched on the USD/JPY market showing a new development.
As a basis, breaking below the low of the consolidation range around 107.32 yen (the low reached after spending most of 2017 in a trading range) might have restarted the decline from the high of the Trump rally, starting at J. Since then, the market has generally consolidated but gradually extended the downside, making a low around 104.63 yen.
In the weekly chart for the last four weeks since the previous issue, the range has been limited to about 3 yen from a high of 107.90 to a low of 104.63, and after the candles broke K, there has been alternating bullish and bearish sessions with little sense of direction.
In the trading plan at the last issue stage, we chose to maintain a short USD position at 107.20 with a lower target of 103.40 yen as the downside. If things go well, this past month or so might have yielded a larger total price movement by targeting smaller fluctuations. The fact that price action is moving in a way that differs from the premise of breaking free from the range itself represents a kind of contradiction, so it is important to handle it with caution.
