|

Currency market: EUR/JPY day trade example

EUR/JPY levels for today as follows

139.41,139.58,139.67,139.76,139.85,139.98.

Vs 140.20,140.29,140.38,140.47,140.65,140.74,140.83.

Eliminate vitals: 139.41, 139.67 Vs 140.47, 140.83.

At 139.41 and 140.83 = Equal oversold and overbought. 139.67 and 140.47 = Perfect neutral. 140.12 = Perfect 0.

From 13 numbers inside the price path, only 4 numbers are vital.

Note traditional short at 140.74. Correct short at 140.83. Why? Current market price ranges lack ability currently to trade to full potential. Missing? 0.5. to 1.0. Seems small and not significant but both are as wide as oceans.

So small is the currency price yet every last pip contains vital trade information.

To include 0.5 then ranges widen to normal as 141.02 from 140.83 and 139.22 from 139.41.

And 139.67 goes to 139.58 and 140.83 goes to 140.74.

If 1.0 was included as traditionally traded then 140.83 goes to 141.46 and 139.41 goes to 138.77. Both expand ranges by 64 pips.

Ranges may expand but most vital neutral points also expands. The currency and all market prices trades neutral to neutral. The day trade goes from neutral to oversold or neutral to overbought. Then trades back to neutral again. The problem to neutral is wide bands exist and many exchange rate points.

To elaborate to neutral. EUR/JPY today allows for 27 pips to normal trade on each side of 140.12. The remainder exist as neutral. Neutral means price may trade up or down under a perfect equal chance. Central banks established equal chance as statistical masters.

EUR/JPY traded today from perfect 139.85 to 141.16. Then 140.83 must be considered a range break and price expansion. Note the 0.5 and 1.0 expansion levels: 141.46 and 141.06 and perfect 1/2 at 140.16.

A range break above 140.83 means EUR/JPY trades back to a wider neutral point area but it also means a range break entails more money profit to shorts. This is the free money side of day trades.

Described today is a tiny portion to the day trade and much information remains missing to put the puzzle price together. To understand is to profit further without loss. Much description remains and the description was never seen or published in the history of traded markets.

The set up

EUR/JPY

Long Short Line 140.12.

Most Important 139.67 and 139.85 Vs 140.20, 140.29, 140.38, 140.47, 140.65, 140.74, 140.83.

Bottom 139.41 achieves by 139.58 and 139.76.

Upper target 140.74 Continuation Fail 40.47.

Author

Brian Twomey

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

More from Brian Twomey
Share:

Editor's Picks

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold holds gains near $5,000 as China's gold buying drives demand

Gold price clings to the latest uptick near $5,000 in Asian trading on Monday. The precious metal holds its recovery amid a weaker US Dollar and rising demand from the Chinese central bank. The delayed release of the US employment report for January will be in the spotlight later this week.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans. 

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.