USD/JPY at September open price for possible further expansion.

USD/JPY

A retest of 50 EMA provides a superior reward to risk ratio but could possibly test the daily trend line where we would need to see bullish signals for USD/JPY strength.

USD/JPY

Japanese current account data in four hours’ time high is deemed high impact on the economic calendar. Consensus stating Y1983.7B from previous Y1468.3B but a miss could see the Yen weaken.

 

Key Points:

  • Daily – Crossed multi-month trend line
  • Daily – Reclaimed 50 EMA and holding
  • Daily – RSI crossed 50 mid-point and trend
  • Daily – RSI divergence to price lower low
  • Price holding above the 200 EMA
  • Price holding above the 50 EMA
  • Fibonacci 50% cluster with 106.500 (March low to March high Range)
  • Retest of 50 EMA would be ideal with bullish reversal, but a breakout of September open also provides possible entry
  • If price hits target 1, move stop to BE and book partials.

 

Key Levels:

Support – 105.800, 50 EMA, 200 EMA

Resistance – 106.500, 106.800

 

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 105.800

Supporting Entry – 106.000

 

Candle Reversals for entry

  • Bullish Hammer
  • Bullish Engulfing
  • Bullish Piercing

 

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

 

IF: Price breaks below 105.487 and violates 200 EMA – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

 

Reward / Reward Targets:

Optimal Entry 105.800 – Target 1 106.500 = 2x Reward to Risk

Optimal Entry 105.800 – Target 2 106.800 = 3x Reward to Risk

Supporting Entry 106.000 – Target 1 106.500 = 1x Reward to Risk

Supporting Entry 106.000 – Target 2 106.800 = 1.5x Reward to Risk