The Best Trading Opportunity Today – USD/JPY – November 24, 2015

Earlier in the session, the USD/JPY broke sharply after making a definitive move under a long-term downtrending angle and a short-term retracement zone. If the downside momentum continues then sellers are likely to go after the nearest swing bottom. A trade through this level will turn the main trend to down.

The main trend is up according to the daily swing chart. The short-term range is 122.217 to 123.748. Its retracement zone is 122.802 to 122.983. A long-term downtrending angle at 122.96 passes through this zone, making this area a valid resistance cluster.

Aggressive traders may want to enter the short side at current levels, looking for increasing downside momentum to trigger a further break into the swing bottom at 122.217. Taking out this price will turn the main trend to down. This could trigger a further break into the major Fibonacci level at 121.793.

The daily chart opens up to the downside under 121.793 with the next major target a 50% level at 120.718.

Less aggressive traders may want to wait for a retest of the resistance cluster at 122.802 to 122.983. This play may carry a little more risk because you will be selling into an intraday rally in an uptrend.

There is also a little danger in selling weakness today because volume is likely to be light because of this week’s U.S. bank holiday on Thursday. Therefore, short-sellers are going to have to get some help from a sell-off in the U.S. equity markets.

Volatility could pick up at 8:30 a.m. ET with the release of the U.S. Preliminary GDP report.

The trade of the day is in the USD/JPY. Traders, however, will have to choose between selling a rally back to 122.802 to 122.983, and selling at the market, looking for an acceleration into and through the swing bottom at 122.217. Better-than-average volume and volatility as well as a sell-off in the U.S. equity markets will help this trade.