Here we are going to look at another live trading opportunity with the same tools in the Japanese Yen.
Let's look at the opportunity.
The Dollar has been under pressure recently against the major currencies and the Yen has benefited, however its rise has been very little in comparison with the Pound and the euro
Pull up the weekly chart
We are using futuresource.com but you can use any of the free charting services.
The weekly trend in the dollar against the yen is up ? this is the primary trend.
Now pull up the daily chart and add these indicators
Bollinger bands, stochastics and RSI
(If you don't know how the above indicators work consult our other articles)
The dollar has dipped to the middle band of the Bollinger band and is now looking to move higher.
Timing the move
To get the odds in your favor you want a change in momentum and this is indicated by the stochastic ? Watch for the lines to cross and turn to the upside with bullish divergence this then puts the odds in favour of the bulls.
Wait for the lines to cross and look also for a rising RSI
When the bulls take charge support will be below Wednesdays close (on a closing basis) and then the double bottom.
Target for the bulls is the double top at 12000
The above is simple way of getting into trades with the price momentum and odds on your side and allows you to act on confirmation rather than trying to predict.
The above trading scenario is taking advantage of a dip in a bull market to re-establish positions with the primary trend.
