The monetary policy statement is on the agenda and all eyes will be on the Yen pairs. I don't think I will trade this event because in contrast with dollar index yesterday I don't see a high probability set-up. Both USDJPY and EURJPY show a response to the low's that have been counted as a wave 1 by many analysts. This can be correct I admit but for me it is 50/50 because pretty much all characteristics have been broken. Those who know me for a while know that I'm not chasing anything and rather enjoy my evening than trade low probability trades. So what's my plan, I will wait and see what the first response will be. IF we see the bullish trend start, there will be plenty of trading opportunities on the horizon, I'll wait in that case for the next consolidation and trade high probability and better risk/reward than what's possible from the current levels.
The only way that BoJ can make me trade this event is if it goes lower first. I see the high risk in a disappointing BoJ because the market is very biased. There are many reasons for that which I understand but that doesn't impact my trading. In the chart I mentioned the possibilities trading this event according to my book. I'll update tomorrow and then we can come up with a high probability set-up with a minimum risk/reward of 3/1. EURJPY GBPJPY
One last thought. USDJPY touched the upper trend line three times within short period. Could this mean, that there is strong interest in buying?
TimStuyts
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yes it could be, but focus on a clear reversal sign because a test alone is not enough (for me at least)
Subjugal
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Of course. Thanks for your answer.
Subjugal
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If I understood you right, USDJPY might go up and reverse? I ask, cause after BOJ decision the decline seems to me like it could evolve to a bullish flag in 4H chart. And in D1 chart, if it doesn´t go below 102, I could imagine it might figure out as move 1 and 2 of an ascending Elliott wave pattern.
TimStuyts
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I had no clear bias in terms of a high probability trade and this was what I was looking for:
'The only way that BoJ can make me trade this event is if it goes lower first.'
I agree with the fact that the 4 hour shows a possible consolidation for all three Yen pairs within channels. However the characteristics for EURJPY and USDJPY aren't looking good for a high probability impulsive wave count from the lows of 06-24 (first move has not the characteristics of a wave 1 as I wrote in the chart). The last impulse USDJPY for example from 99.95 could very well be a wave C. So looking at the 1hour time frame USDJPY shows us a possible leading diagonal lower. The chart hopefully shows why I was looking for that move lower, if I see a buy I'm either buying a wave 2 or the continuation in case we are in fact consolidation on the 4hr time frame.