Will USDJPY Consolidate This Week? 112.00 A Likely Destination
This week we might witness USDJPY move up and down as many central banks announce their policies and NFP reading as well. The 115.000 strong monthly resistance is yet to be tested by this pair! Its surprising with such a powerful strong uptrend it was not able to test this level. However this week shall the descending channel break, we can see the pair climb and come near that level.
Positive RSI divergence on 4H indicates that an upmove might be on the horizon. However as traders, we look for confirmation. In this case, we need the higher high on 4H chart to break (4H candle must close above it), then evaluate our entry points for a LONG trade based on the RISK TO REWARD (RR) ratio. Our potential take profit target in this case would NOT be 115.00 level! infact its ideal if we target the next HIGHER HIGH on the 4H chart as our target. It all depends on the RR as 1:1 is an ideal target
Shall the above scenario finish taking place or if it does not take place at all, we can look to take this pair SHORT. Again not without confirmation!. We need the 4H candle to close below 113.00 and to target 112.00. Once the break takes place, the RR needs to be evaluated, if feasible a short entry could be taken.
All in all its a two way scenario for USDJPY this week. Meaning it will either rise towards 115.00 then aim to hit 112.00 or it will just keep its descend towards 112.00 level
For those of you who want to take this pair beyond 115.00, its a very risky move for the following reasons:
1. The pair is too overstretched and a consolidation move might likely take place. many traders based on fundamental market picture would prefer to enter LONG once the price retraces at around 112.500 to 112.00 level.
2. Look at the first point: see the word FUNDAMENTAL MARKET PICTURE? yes its based on purely fundamental analysis of the markets. as for us technical traders, confirmation is the key. in this case we need to wait monthly candle close above 115.000 then evaluate to go LONG based again on RR
The month of November would likely be interesting for USDJPY. Based on the fundamental picture its likely 115.000 would be broken this month as inflation and RISK OFF mood drives the markets.
THIS JUST REPRESENTS MY ANALYSIS ON THE OUTLOOK OF THIS PAIR. TRADE SIGNAL WOULD BE POSTED IN A NEW POSTVSHALL ALL THE CRITERIA BE SATISFIED
Positive RSI divergence on 4H indicates that an upmove might be on the horizon. However as traders, we look for confirmation. In this case, we need the higher high on 4H chart to break (4H candle must close above it), then evaluate our entry points for a LONG trade based on the RISK TO REWARD (RR) ratio. Our potential take profit target in this case would NOT be 115.00 level! infact its ideal if we target the next HIGHER HIGH on the 4H chart as our target. It all depends on the RR as 1:1 is an ideal target
Shall the above scenario finish taking place or if it does not take place at all, we can look to take this pair SHORT. Again not without confirmation!. We need the 4H candle to close below 113.00 and to target 112.00. Once the break takes place, the RR needs to be evaluated, if feasible a short entry could be taken.
All in all its a two way scenario for USDJPY this week. Meaning it will either rise towards 115.00 then aim to hit 112.00 or it will just keep its descend towards 112.00 level
For those of you who want to take this pair beyond 115.00, its a very risky move for the following reasons:
1. The pair is too overstretched and a consolidation move might likely take place. many traders based on fundamental market picture would prefer to enter LONG once the price retraces at around 112.500 to 112.00 level.
2. Look at the first point: see the word FUNDAMENTAL MARKET PICTURE? yes its based on purely fundamental analysis of the markets. as for us technical traders, confirmation is the key. in this case we need to wait monthly candle close above 115.000 then evaluate to go LONG based again on RR
The month of November would likely be interesting for USDJPY. Based on the fundamental picture its likely 115.000 would be broken this month as inflation and RISK OFF mood drives the markets.
THIS JUST REPRESENTS MY ANALYSIS ON THE OUTLOOK OF THIS PAIR. TRADE SIGNAL WOULD BE POSTED IN A NEW POSTVSHALL ALL THE CRITERIA BE SATISFIED
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