USD/JPY Potential pullback and bull run?
USD/JPY is a pair I have been sat on the sidelines with for some time. It just hasn't offered the trading set-ups I look for. However, that looks to change this week if price forms this pullback i am expecting.
Starting from the higher time frames, price formed a very strong wick rejection of 105.200 before almost reaching back to its monthly opening price. This shows a clear rejection of price making further lows. If we see a monthly close anywhere near its current price level it will form an almost perfect higher low indicating a shift in the trend after prices sharp decline from 114.000.
This descent from 114.000 can be seen much clearer on the weekly time frame, with price consistently and strongly collapsing across 4 weeks. Even if price was to continue its decline, I believe it would be in need of a strong pullback for further short orders to be met.
However, this daily set-up has arisen and I currently favour short term longs. On the daily time frame, we failed to close below 107.500 following a daily bearish trend consisting of lower highs followed by lower lows. Price looked to form a further lower high and potential penetrate 107.500 but instead the bulls ruled to momentum and bearish trend structure was broken. Price now sits within a 90 pip daily range between 109.000 & 109.900.
Personally, I am watching price and looking for a slight pullback and retest of 109.000. If this is fulfilled with strong bullish candlestick confirmation, this will be the area I look to long from. My initial target sitting at 109.900 and if broken, 110.500 fulfilling a 150 pip move.
There are fundamentals that support this idea but I will not get into these on TradingView.
Starting from the higher time frames, price formed a very strong wick rejection of 105.200 before almost reaching back to its monthly opening price. This shows a clear rejection of price making further lows. If we see a monthly close anywhere near its current price level it will form an almost perfect higher low indicating a shift in the trend after prices sharp decline from 114.000.
This descent from 114.000 can be seen much clearer on the weekly time frame, with price consistently and strongly collapsing across 4 weeks. Even if price was to continue its decline, I believe it would be in need of a strong pullback for further short orders to be met.
However, this daily set-up has arisen and I currently favour short term longs. On the daily time frame, we failed to close below 107.500 following a daily bearish trend consisting of lower highs followed by lower lows. Price looked to form a further lower high and potential penetrate 107.500 but instead the bulls ruled to momentum and bearish trend structure was broken. Price now sits within a 90 pip daily range between 109.000 & 109.900.
Personally, I am watching price and looking for a slight pullback and retest of 109.000. If this is fulfilled with strong bullish candlestick confirmation, this will be the area I look to long from. My initial target sitting at 109.900 and if broken, 110.500 fulfilling a 150 pip move.
There are fundamentals that support this idea but I will not get into these on TradingView.
Trade closed: target reached