Yesterday, I posted the Breakout Trade setup of USDJPY pair. However, the price stayed within the range and the breakout never happened.
However, I found the Bearish divergence on H4 chart during NY session. ( I shorted it, but it didn’t work out! )
Instead, the price dropped today during the Asian hours. (Here is the lesson. If you find some patterns on H4 chart, it takes some time until the actual movement occurs, because this is H4 chart! So please do NOT trade right away based on the analysis of H4 chart. We need the confirmation on the smaller timeframes).
Price action wise, the price made Lower Low. Thus I see the possibility of the reversal. I would like to look for the Short opportunity if the price forms Lower High. For the target, I would like to see the price comes down to WPP level (119.86).
(Above: the price broke the floor of the range, forming Lower Low)
Here is the sell zone.
Please find the reversal price action somewhere between Fib 38.2 – 61.8% (120.84 – 121.00).
The conservative target will be DM1-DS2 (120.47-120.65).
The aggressive target will be Fib 138.2% (120.30), or even WPP (119.86).
Hope this analysis will help you develop your own.
YJ Baik – Forex.Today @ Tokyo