USDJPY is classically divergent on the MACD and oversold on the Stochastic. Also a shallow stoch cross and pair recently touched the 800 SMA. No trend clearly in place on 60M. Although this looks like a great setup, I have learned to be careful with this pair as it often reacts differently from what one expects. I will take a short entry only if pair falls out of oversold and confirms at least one candle on the 60M. And only if there is a reasonable win-lose ratio after confirmation. I’d rather miss the trade by waiting for confimation than forcing an early postion due to this pairs historical behavior.
Update 23July08 – This trade idea is closed. The trade technically happened but the potential profit became too small that I decided it was not worth entering. I will watch this pair for another setup as it is about to hit the 800 again on the 60M.
USDJPY Divergent Oversold Setup 23July08:
USDJPY – Trade Setup closed, worked but profit target was too small to take