Hourly trading plan on USD/JPY
This USDJPY hourly chart allows us to take three different positions depending on how market is going to move today and the first bias should be on the upside, so call options with daily expiry are recommended.
We are looking here for an impulsive move with a running correction for the second wave and these kind of corrections should not break that 0-2 trend line visible.
It means that the correction is not completed yet and most of the times it completes with a triangle, which may or may not be contracting.
In such an impulsive move everyone is looking for an extension. We’re doing that too here, but before the extended third wave to start, we need to see the second wave completed.
There are no important economic releases today so the positioning will be key and will take into consideration only what equities will do as well as the bigger picture when it comes to Friday’s GDP in the United States.
Considering what happened over the weekend in the UK, I will say flows out of GBP will influence USDJPY as well via crosses. This will make this Monday a bit more interesting than a regular one.
How to trade
The upside should be limited so any move above 113.57 on a Monday should be met with criticism so put options should be traded at that level or above, with the same expiration date.
When it comes to the downside, a clear break below 112.61 should open the gates for a prolonged move lower so put options should be traded as well as bears will see that break as a decisive one.