Forex Trading Strategy Update

with Vito Henjoto April 4, 2014

Good morning everyone. This is Vito Henjoto, Senior Technical Strategist

at Invast Financial Services and today is the 4th of April 2014. NFP day is

today.

The market has been pretty much preparing itself for what’’s going to

happen tonight. The numbers are expected to come out really bullish. The

forecast was for 199,000. The previous number was 175. This time around

though, I have a little bit of a suspicion about the numbers here. My

personal view on the non-farm numbers is it’s going to be about 180 to

185,000. We might see a little bit of a gain from last month, but are we

going to be seeing that drastic gain that the market is so bullish about? It

was 199. I have my doubts. Three out of the four unemployment claims in

the past month actually has come in below forecast. My expectation is

between 180 to 185,000.

Let�’s take a look at the currency pairs here. What is in store for the

EUR/USD, GBP/USD, southern Japanese Yen crosses as well?

Take a look at the EUR/USD here. We�’re seeing a little bit of support

coming in at 1.37. The EUR/USD fell on the back of ECB’s rather dovish

comment using the unconventional method to stave off the low inflation,

but they haven’’t done anything as of yet. Right now, for the EUR/USD, we

have support at 1.37 from a technical point of view, and as long as this

level holds, we might see a continuous grind attempting to break upside.

The current range is basically between 1.37 to 1.38. That’s the expected

range for the day here, when you see a confirmed close, at least about

1.3790, on the 4-hourly time frame which will take the pair above the

Ichimoku cloud here on the 4-hourly time frame. To position our self, right

now, I much prefer going long right here on the support at 1.37.

Stop loss should be really tight here. If we are attempting to go long, our

stop loss will be at least below 1.3675 and in terms of intraday target we

are going to be looking at 1.3750 - 1.3775. We might see a little of

rejection or stalling right around that level as price attempts to break above

the Ichimoku cloud here as well as this trend line that’s keeping the market

in check. This is in the form of a descending triangle. The problem with this

--- it happens in an uptrend, so it might be more of a continuation pattern

rather than anything else. On the flip side, if it does break below the 1.37

level, we should keep a close eye because we have a major trend line that

is slightly below that level there, at 1.36.

Take a look at the daily time frame here. The Stochastics --- attempting to

dip below the trail level. If it does cross up and come off the oversold

condition, we can see that rarely happen in the EUR/USD.

Similar scenario with the GP/USD. The GP/USD, I think in the past videos

and during the live market analysis, I did mention that there�’s a support

trend line here and if it does break below, we’’re looking for a return

towards the zone here at 1.6575. It did happen. The price kind of bounced

off slightly from 1.6575. Right now, the Ichimoku cloud is still strong. It’s

starting to build up more support here. As long as we don�’t go any lower

than 1.6575 intraday wise, then we might see a bounce happen on the

GP/USD as well. The EUR/USD and the GP/USD --- there is a much

higher probability that the USD is actually going to go a little bit weaker. So

the EUR/USD and the GP/USD might see some sort of recovery today.

Another thing to take a look at is the EUR/JPY here and the USD/JPY.

This is the EUR/JPY. We are right now at 142.50 still holding on pretty tight

here and not letting go. This is actually previous resistance area, previous

support area, and even though prices are trading below the Ichimoku

cloud, this is on the early time frame, the Stochastics is within the oversold

region. If it does cross back up above 20, then we might see a little of a

push higher.

How far up can the EUR/JPY go? Well, take a look at this one here. This

will be our Fibonaccci to look at. We have 61.80 percent, a 143 and that is

pretty much at the top of the range of the Ichimoku cloud. So that will be

resistance number one at 143 and beyond that it‘s going to come in very

close to the major fit levels here and that would be a 38.6 percent at

143.65. Between 143 – 143.65, we are likely going to be seeing a little bit

of a resistance there on the EUR/JPY.

Next up is the USD/JPY. Again, unable to close above 104 on the

USD/JPY. However, take a look at the momentum here. This is still likely

going to be pretty strong. We�’re just waiting for the pull back to happen.

Initially, we are going to be looking at pull back around 103.50 area, so

between 103.40 - 103.60 that's where the [indiscernible] is located. If it

does go below that level there, then it might go down to 103 before we see

any bounce happen on the USD/JPY. Keep in mind for now, overall the

USD/JPY is still very bullish. Attempting to go short right now is rather

risky because we don�’t see any strong selling pressure on the USD/JPY.

So that’’s all for today and good luck with your trades. Again, NFP numbers

tonight --- very interesting to see what happens. Is the Fed going to taper

or not going to taper? It�’s not really a matter of just the employment

numbers right now as the others have mentioned before. They’’re not really

just taking a look at the employment numbers. So we will see how the

market reacts to that and good luck with your trades. I’’ll catch you guys

next week.

Watch Vito’s videos here - www.youtube.com/InvastInsights