Since no one REALLY knows where the market is going to go, my job as a technical analyst is to find an edge for my traders after studying past patterns in the market. Studying those patterns, along with the help of my favorite Fibonacci ratios, will help us anticipate what to expect in the future.
We currently have a setup in the December Japanese yen futures chart. Here I found a cluster of Fibonacci price relationships that overlap each other on the daily chart just using the prior swings made since the 9/2 low. There are at least 6 Fibonacci price relationships that suggest possible support on this chart at the 9821-49 area. They include Fibonacci retracements and 3 price projections along with a 1.618 extension of a minor swing.
If the current pattern of higher highs and lows on this chart is going to continue, then this is the area the yen ideally holds above in the coming sessions. If we do see price hold, this chart shows gives us potential upside targets at 10076, 10137, and then 10222.
I do have to define my risk on this setup as usual, so if we break the support cluster listed above by 30 points, I will consider myself wrong on the trade setup. Bottom line, I’m betting the buy side of the yen and looking at buy triggers as long as key support is still respected.