USDJPY - Bullish continuation into rounded retest

FX:USDJPY   U.S. Dollar / Japanese Yen
Since the start of the year, price has been in a HH/HL uptrend. Following this structure, we can assume that price will do the same this time round.

The 0.786 level at 105.4 is likely to hold due to a) it being a fib level b) being a previous 3-touch resistance. We can enter here with a stop loss below the previous low at around 104.25 with a take profit at the 106.6 level, but this isn't the highest probability approach (I don't see anything wrong with it though).

What I'll be placing a blind short entry on is the 106.6 level. This is because:
  • The swing low in 2011 and the swing high in 2015 forms our long term fib. It's 0.618 level is our 106.6 level.
  • The SH/SL from February and March last year form our current fib range. It's 0.5 level is also our 106.6 level.
  • It's a multiple touch (I counted 4 where it was respected) support level throughout last year.
  • People will have seen this and recognise it as the nearest long-term resistance over the months. This means there's a high chance there will be lots of limit orders here.

My take profit will be the equal highs around 105.7.

My stop loss will be around 107.06, but allowing for a wider stop at the top of the thrust candle at 107.3 wouldn't be a bad idea.

In summary:
Setup 1 (long up to 106.6):
Entry: 104.845
TP: 106.598
Stop: 104.24

Setup 2 (higher prob. short from 106.6):
Entry: 106.598
TP: 105.725
Stop: 107.06 or 107.3 for a wider stop

Let me know what you think and give me a follow for more.

Happy trading!

P.s this isn't financial advice, please check whether Mercury is in retrograde before trading
Comment: Unfortunately our first entry didn't get hit. However, the trade idea was correct (so far). Keeping my eye on the resistance for a decent entry.


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