The USD/JPY has created a whirlwind for Forex traders as they try to anticipate the gyrations of the Japanese Yen in fast and volatile conditions.

The USD/JPY touched values yesterday it had not traded since January of 2002. A high of nearly 134.540 was achieved before the Forex pair started to reverse off of this lofty height. Please note that the words all-time high were not used, because from May 1998 to September of 1998 USD/JPY traded above its current values. An apex of approximately 147.500 was hit in August of 1998.

While technical traders may not be interested in history lessons, what they are interested in are defined outlooks.  The current value of the USD/JPY is roaming extreme values as the U.S Federal Reserve has undertaken a hawkish monetary stance and contemplates higher interest rates, as the Bank of Japan appears ready to sit on their hands and not react.

However, the inactivity of the BoJ cannot be interpreted as doing nothing. The monetary goals the Bank of Japan has for the USD/JPY are complex, and certainly behind the scenes there must be talk about policy that is ongoing. In the meantime, financial institutions and speculators are left wondering what is going to happen next as the USD/JPY trades without any intervention.

A reversal off of highs yesterday has brought the USD/JPY below the 134.000 mark again. As of this writing the USD/JPY is trading near the 133.850 mark, but conditions are fast, and volatility is a constant threat. Speculators should remain conservative in this environment and choose their entry points to ignite trades carefully. Market orders may get a trader into a wager quickly, but there is a risk that prices fills could produce unexpected results.

The bullish trend of the USD/JPY is likely not over quite yet.  Determining the exact location when the USD/JPY will be overvalued remains difficult to guess. The U.S Federal Reserve is set to raise interest rates and make their pronouncement regarding their outlook for more hikes next week. Traders may get their best results by looking for support levels to be challenged and then launch buying positions to try and capture additional upside momentum.

The USD/JPY is certain to be choppy near term and speculators need to practice risk management. If the USD/JPY were to test the 133.750 to 133.600 levels it may be worthwhile to pursue a buying position that seeks a quick hitting trade upwards to capture a targeted take profit with a realistic goal.

USD/JPY Short-Term Outlook

Current Resistance: 134.150

Current Support: 133.570

High Target: 134.650

Low Target: 132.810

The market will continue to be very noisy, but if it does survive the coming crypto winter, Tron could be more of an investment and less of a trade.

Tron had a bullish session on Wednesday, reaching above the nine cents level. However, we have given back quite a bit of this gain, and it is a market that still looks to be trying to build up enough momentum to go higher. Tron is not going to do well in this environment over the longer term, despite the fact that we have seen a significant bounce. The 50-day EMA has broken above the 200-day EMA, forming the so-called “golden cross”, but quite honestly this is a market that is pretty far out there when it comes to the crypto world.

Tron is a blockchain that I have used before, and I find it quite useful. The biggest problem is that it is rather small, so it’s overlooked when it comes to crypto traders until we get into “altcoin season.” The markets will continue to be noisy but based on the candlestick for the trading session on Wednesday, it looks like a pullback is more likely than not. If we do pull back from here, then I think we will go looking to reach the $0.07500 level. Looking at this chart, it’s worth noting that the 50-day EMA is sitting in that same general vicinity and rising, so one would assume that there will be a certain amount of “dynamic support” in that area.

If we were to break down below the 200-day EMA, the market could drop to the $0.06 level, an area where we had bounced from previously. That is an area that has been broken to the downside that could open up fresh selling, and with the way that crypto has been behaving, it would not be a huge surprise at all to see Tron fall apart for the short term.

We need to have a conversation about the fact that some of the crypto markets are going to disappear in the next year or two. Tron is a very speculative market, so you need to keep abreast of the idea of what is going on with the ecosystem. The market will continue to be very noisy, but if it does survive the coming crypto winter, Tron could be more of an investment and less of a trade.

Today’s pivotal point is likely to be 0.7083.

My last signal from 27^th April produced a profitable long trade from the bullish pin bar which rejected the support level I had identified at 0.7082.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be entered before 5pm Tokyo time Wednesday.

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7183.
• Place the stop loss 1 pip above the local swing high.
• Move the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7082 or 0.7006.
• Place the stop loss 1 pip below the local swing low.
• Move the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

AUD/USD Analysis

I wrote in my previous piece on this currency pair on 27^th April that the price was still making lower lows and lower highs, which suggested the medium-term bearish trend was still in force.

Therefore, I was looking for a bearish reversal at 0.7235, which would present an attractive short trade entry point.

I was correct about the primary direction of the day, as the price fell over the day and reached as low as the support level which I had identified at 0.7082 shortly before the Tokyo close, but the price gave a nice short-term long trade from that level when it was reached, signalling its intention to move higher with a bullish pin bar on the hourly chart.

The price now is back where it was one week ago. The RBA just announced a 0.25% rate hike which some analysts had been expecting, but which surprised many who had been expecting a hike of only 0.15%. This caused a short-term bullish price spike of approximately 1%, but this quickly ended within 45 minutes, with the price retracing back to its consolidation area just above the nearest support level at 0.7082.

It seems clear that this support level at 0.7082 is going to be today’s pivotal point. The price is clearly within a long-term bearish trend, so the highest probability setup that might emerge today would probably be a short trade entry following the price getting established below 0.7082. This would likely trigger a further fall to the 0.7006 area which could be strong long-term support.

On the other hand, if 0.7082 holds as support, we will probably see the price rise over the short term.

Regarding the USD, there will be a release of JOLTS Job Openings data at 3pm London time. There is nothing of high importance due today concerning the AUD.