My focus pair today is USDJPY and while the Yen seems to be gaining ground as the chart shows, I expect prices to possibly rebound and edge higher in the coming days. These are my reasons. In the weekly chart, stochastics are turning from deep the oversold territory and we have that clear buy signals and higher highs which begun from late March 2018.
What’s interesting though is this minor resistance at last year’s lows and this is why I really think that this week’s price action could possibly shape the short to medium term trend of this pair. With this resistance, last year’s lows or support will effectively become a resistance zone if it succeeds in rebuffing further bull pressure.
When we zoom in to the 4HR chart, prices are retesting a key support line. Even though our technical indicators are mixed, we should practice patience and wait until there is a stochastic buy signal or a double bar reversal pattern prints at this level. On the flip side, conservative traders can wait for a close above last week’s highs at around 107.80 before initiating longs.
Because of this projection, my USDJPY trade plan would be as follows:
Buy Stop: 107.80
Stop Loss: 107
Take Profit: 112 but ideally at 115
Let me know what you think. Have a good trading day!!