Free Profitable Forex Newsletter
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Buying USDJPY With a Target Toward 113.00
A good looking setup on USDJPY has been forming for a while, though the pair has been slow to move in recent times. Nonetheless, the wind for USDJPY in the current environment continues to blow up and that is supported from the technical analysis perspective as well as from the fundamentals.
This trade would accompany last week's trade (short Gold) in that both trades are long USD against safe-haven assets. The US economy remains the only major economy that has not slowed substantially and that keeps the US Dollar supported on a broad basis.
The currency is rising against all of the major currencies and the Yen has not been excluded much, though USDJPY has a typical tendency of rising at a very gradual pace. In either case, the strong rebound in US stock markets since late December and the still well-performing US economy should be enough to provide USDJPY with another push higher toward 113.00.
The technical setup looks very nice here with the price trading near the support trendline and a clearly open room for the pair to rise toward 113.00.
The technical situation is more clearly shown on the charts below. Entries around current levels with a stop below 111.50 and targets toward the upper end of the rising channel look attractive at this point.
The Daily chart looks supportive of further gains, but today's close will also be important here regarding the formation of a bearish engulfing pattern. If USDJPY manages to rally by the end of the trading session and closes off the lows today that will confirm the bullish bias on the daily chart.
If on the other hand, it closes with a bearish engulfing candlestick pattern, then that will confirm the 112.00 resistance and the 111.50 support will be at a higher risk of being broken.
Looking at the intraday 4-hour chart, yesterday, USDJPY spiked and broke above the 112.00 resistance and today it’s again trading below it. But, this return below former resistance (now support) isn’t necessarily that negative for the pair. Especially for as long the support trendline at 111.75 and the broader support zone at 111.50 holds.
- Around current levels (111.85) or closer to the support zones if possible
Stop loss:
- Below the 111.50 support (as described above)
Targets:
- Toward 113.00 (as described above)
Trade signals from the past week
- Trade triggered March 25, 2019 – Long GBPUSD from 1.3150, stop taken out at 1.3000 = -150 pips
- April 17, 2019 – Short Gold from $1275 (in progress)
TOTAL: -150 pips in the past week
TOTAL: +1105 pips profit since October 1, 2018
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