USD/JPY Long Trade

[Nelsy-Boy]

Once again just playing in the demo. Would it matter to go long USD/JPY as per TA and a break out of the cloud on the daily and a very flat top of cloud. Then, go short USD/SGD as per my other topic header. Would I expect to go long on both USD/JPY and USD/SGD? 

[Caseynotes]

@Nelsy-Boy, usdjpy has a mind of it's own and won't always play along with the other currencies and can go the opposite way to the other usd pairs so you are right to think you could go long one and short another if the TA sets up that way.

In the chart above price is trying to break that recent resistance level but keep an eye on possible RSI divergence and also that big spike may have distorted the cloud somewhat.

 

[Nelsy-Boy]

Thanks @Caseynotes. I understand divergence, but just how far back from point to point is acceptable for it to be relied upon as a decent signal. The one above is about 16 periods, i.e. days in this case, with a lot of peaks and troughs in between the two possible divergent highs.

[Caseynotes]

I would stick to major peaks and troughs, they need to be significant. The chart and the indicator need to line up so though you have minor peaks on the indicator but there are no real corresponding peaks/troughs on the chart until that dip down to RSI 50 then rise just before the Feb marker. The minor stuff on the indicator I would consider to be just noise.