Trade Idea: Going Short on USD/JPY Could Be Good Right Now

USD/JPY has thus seen 250 pips rally in the week, the currency pair reached a week high of 111.77 after having opened with a strong gap on the upside. Price momentum failed to close above 111.60 (support now turned resistance).

A bearish Doji candle formed at yesterday’s trading session to also close around the 61.8% Fibonacci retracement level at 111.05

Short at this level with stop placed above 50% Fibonacci retracement level at 112, while TP with 107.15

 

WHY I WOULD WANT TO BUY GOLD NOW

Having had a steep rally from $1200 per ounce to a year high of $1295.25, the precious metal has thus seen a correction trend downwards to 1263 (resistance now turned support).

Trend analysis:

Using Fibonacci extension to project the profit taking level for the uptrend 1122.62 low reached on 15/12/2016 and high of 1263.63 reached on 27/02/2017 at 1287.10 which was reached and slightly breached to reaching an high of 1295.28 per ounce. 

We expected profit taking to drive a corrective move downward to 1263 a resistance now turned support and also testing the Moving Averages now acting as dynamic support trendline (see chart below)

Currently the price of Gold is hovering around 1265 after it reached 1263 projected end of the corrective wave. 

 

Expectations:

Buying Gold around 1263 – 1265 zone with stop placed at 1250 and take profit level at 1301

Happy Trading day

Trade Idea: Gold Poised For Correction

The sharp upside rally in the precious metal from $1200 to a high of $1295.28 per ounce (marginally surpassing our second projected target level of $1283 per ounce) has since reduced its momentum as the oscillator indicator on the daily chart indicates trading at overbought territory.

We expect a corrective wave to begin at this level to 1263 where the impulse wave is expected to resume towards $1301

Happy Trading Day