11-18-06

USDJPY

There was no trade in the email on Friday. Had we still been long, we would have use the moving average on the 15 minute chart as a trailing
stop and the last exit would have been at 1.1825. Once again, the large area of supply on the US Dollar Index daily and weekly charts is what stopped the dollar rally and forced the sell off in the dollar currencies including the USDJPY which had been the strongest.
It was not the economic data. If the sell off had been due to the release of the economic data at 7:30 AM on Friday, why did it take an hour after the release to start selling off, and why have I been able to tell you that there is a ton of supply on those charts for the last 3 emails? The areas of supply and demand are on the charts and when the price trades near an area where there are more sellers than buyers, like it did on Friday it will sell off. If you trade without knowing where these areas are, make sure you use a tight stop. Don't buy and hope.
If the USDJPY rallies from here, I'm a seller at 1.1822. My first target will be 1.1780. If it trades lower from here, the range will be 1.1758 to 1.1700 once the breakout support areas at 1.1726 and 1.1715 are absorbed. I would short the 1.1758 area the first time that the USDJPY retraces to it.
The 240 chart below shows the range in a much clearer picture.