The selling in USDJPY has run out of steam…for now
There’s an old trading saying we had on the floor, “He who picks bottoms, gets smelly fingers”. That’s in reference to trying to pick a bottom after a big fall. Trying to catch the falling knife is another version. That’s often sound advice as sometimes our brains are mentally wired to try and fade a big move, without any regard for the fact that a price can fall further.
If you really want to try and pick a bottom (or a top), then the first thing to is look for signs of exhaustion. We’re seeing that in USDJPY now.
From what has been persistent selling today, we’re finally seeing some sideways action. Does that mean we jump in with longs expecting a 100 pip jump? Not in the slightest but if we want to scratch that knife catching itch, they key is looking for a low risk area to do so. The price is either going to go one way or the other. Watch the lows around 109.35/40, and the near resistance at 109.60. lean against them with very tight stops or go with the breaks, also keeping stops tight.
Where we’re not seeing any exhaustion is in GBPUSD and EURUSD. Cable has taken out 1.42 and the euro is zoning in on 1.24. To coin another saying, I’m not touching those with a bargepole right now as it’s too volatile.
Trade safe folks.