Chip The Chartist - 2013-01-05 538x218

Chip The Chartist Weekly Report – 05-Jan-13

The last time USDJPY moved this much (in percentage terms) from it’s 52 Week Moving Average was back in March 2008.

Back then it reverted to it’s mean (MA(52)) as part of an overall 50% retracement.

At these levels one would expect some form of mean reversion and retracement soon.

Chip The Chartist - 2013-01-05 - USDJPY Weekly Chart

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This set up requires some evidence that a reversion to the mean is under way.  This would preferably come on the Daily chart and would be a recognisable reversal candle such as a Doji or a Daily Key Reversal.

Entry
This is dependent on the evidence – A break of the Low of a recognisable reversal candle on the Daily chart though, would be appropriate.

Stop
The obvious Stop would be above the High made prior to the reversal “evidence”.

Target
Obvious targets are a 50% retracement and the MA(52), especially if they coincide with each other.  If this USDJPY uptrend is to resume after a pause this area of confluence would be where most would expect support to come.

Chip The Chartist - 2013-01-05 - EURGBP Daily Chart

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This set up can be played in a number of ways depending on your trading style and approach.

Entry
This trade is valid whilst the trend-line and the most recent Higher Low remains intact – So it is reasonable to suggest an Entry at these levels is valid.

Stop
The obvious Stop is below the trend-line and the most recent Higher Low, around 0.8080) – If this holds then the Stop can be trailed at subsequent Higher Lows and below the rising 200 MA as and when it catches up with price.

Target
There may be resistance at the previous High (around 0.8220) but if this can be broken, there is very little in the way of resistance until the Highs of 2012 (around the 0.8500 level).

Chip The Chartist - 2013-01-05 - GBPCHF Weekly Chart

After an impressive run up of almost 4,000 PIPs in 12 months GBPCHF has been in an obvious Bear Flag accumulation for the last 6 months.

GET INVOLVED

This set up can be played in a number of ways depending on your trading style and approach.

Entry
I would prefer to see a break and close above the upper trend line of the Bull Flag. At present this would be a Daily candle close above 1.5000 or thereabouts.  Entry can then be made on close or on break of the “trigger” candle high.

Stop
The obvious Stop is below the lower trend line of the Bull flag and the 52 Week Moving Average (shown).  A more aggressive Stop would be the low of the “trigger” candle.

Target
After the previous high of last year (around 1.5500) there is not much else in the way until 1.7000 where there is significant historic resistance.  That provides a very nice Risk:Reward for what could be a 6 – 12 month trade.

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DISCLAIMER & COPYRIGHT

This report is based on my analysis on my charting package. It may differ to yours as it can be affected by time, market movements, charting packages and broker prices. I accept no liability for loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on any information in this report or analysis.