10/5 Today's three currencies from Hashimoto Kosei's 'FX Outlook'

Kosei Hashimoto's 'FX Outlook' October 5, 2017 08:57

Publisher: Daily Market (Kosei Hashimoto)

[USD/JPY]

(Strategy) Counter-trend trading within the dollar range

(Comment)

Yesterday USD/JPY formed a takuri line and failed to test the downside. The upside moved sideways, and even the second support that had risen sharply was broken, leaving price action squeezed on both sides, so it won't move until tomorrow's non-farm payrolls. Yesterday's ADP private payrolls also came in exactly at forecasts, making it hard to initiate moves during today’s overseas session on rumors.

Today in the 112.20–113.20 yen range, it will be a counter-trend. This counter-trend position will be treated as a day trade. We will sell on the pullback around 113.10–113.20, with a stop at 114.10. If the price does not drop enough during the day, we will close about half of the shorts, and add to the shorts on tomorrow's employment data spike. Of course you can close all, but in that case we will shape positions for next week based on tomorrow's employment data release.

On the downside, buy the dips below 112.40, with a stop at 111.80. Longs will be day trades. Note that the central range is 112.40–112.90.

[EUR/USD]

(Strategy) Euro range; confirm below 1.1670 or above 1.1830 today and tomorrow

(Comment)

EUR/USD also closed with a small-range bullish candle, staying within Monday's nearly flat bearish range (1.1733–1.1808). For the time being this pair is eyeing the high of around 1.1910–1.1920, and if it breaks above, it will test resistance at about 1.2050–1.2090. Therefore, if it rises above 1.1820, we will lightly buy the dips and then sell on a pullback.

On the downside, a move below 1.1690 would end or we would like to see a touch of 1.1670. Until then, buy the dips around the 1.1690 support.

Today in the 1.1710–1.1810 range, it will be a counter-trend. Buy the dip around 1.1730, with a stop at 1.1665. On the upside, sell into strength in the 1.18x area, with a stop at 1.1845. We'll close both sides of the positions.

[EUR/JPY]

(Strategy) Euro range; counter-trend

(Comment)

EUR/JPY also traded in a very narrow range with little movement. Today it seems unable to move around the mid-132s. However, the third line of support from the 115-yen level has reached 132.10–132.20, and if this breaks, a strong support at 131.00–131.50 will be tested. In this case, EUR/USD would likely break below 1.1670.

Today in the 132.20–132.90 range, it will be a counter-trend. Buy the dips near 132.30, with a stop at 131.90. On the upside, sell into strength above 132.80, with a stop at 133.35. We'll close both sides of the positions.

If today's range is broken, there are resistance levels at 133.30, 134.10, and 134.40–134.50. Near the end, euro selling will occur. On the downside, the 131.00–131.50 zone is solid, so buy in the low 131s. A break below 131.00 or a rise above 134.60 would start a new trend.

Kosei Hashimoto's 'FX Outlook'

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