USDJPY → Bear Run Complete! Bounce back to 152.000? Let's Answer
Updated
USDJPY has officially broken out of the bull channel it's been in since February 2023 and fell hard into the Weekly 200EMA! The final Daily bear candle closed with a large wick over 1/3 the total size and the following Daily candle closed with a long tail as well. Does that mean we're going up?
How do we trade this? 🤔
A bear breakout on a bull channel after the double top reversal is usually a signal that we're about to enter a trading range (sideways price action). We have a good show of Support at the 200EMA and possibly up to the previous high in the bull channel between 143.850 and 144.850, but we need confirmation to ensure that this Support zone is real which includes a strong bull followthrough candle on the Daily chart.
Look to long toward the bottom of the trading range after it's been established, an entry around the 145.000 area is reasonable looking for a 1:1 scalp or 1:2 swing on a lower timeframe.
💡 Trade Idea 💡
Long Entry: 145.500
🟥 Stop Loss: 143.200
✅ Take Profit: 150.100
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Bear Breakout of Bull Channel, Entering Trading Range.
2. Three Legs Down to Daily 200EMA.
3. Two Large Wicks on 200EMA, Look for Confirmation.
4. Trend Change, Establishing Trading Range between 145.000 and 152.000.
5. RSI at 35.00 and below Moving Average. Wait for Confirmation to Long.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
A bear breakout on a bull channel after the double top reversal is usually a signal that we're about to enter a trading range (sideways price action). We have a good show of Support at the 200EMA and possibly up to the previous high in the bull channel between 143.850 and 144.850, but we need confirmation to ensure that this Support zone is real which includes a strong bull followthrough candle on the Daily chart.
Look to long toward the bottom of the trading range after it's been established, an entry around the 145.000 area is reasonable looking for a 1:1 scalp or 1:2 swing on a lower timeframe.
💡 Trade Idea 💡
Long Entry: 145.500
🟥 Stop Loss: 143.200
✅ Take Profit: 150.100
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Bear Breakout of Bull Channel, Entering Trading Range.
2. Three Legs Down to Daily 200EMA.
3. Two Large Wicks on 200EMA, Look for Confirmation.
4. Trend Change, Establishing Trading Range between 145.000 and 152.000.
5. RSI at 35.00 and below Moving Average. Wait for Confirmation to Long.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Trade active
Entered the market with a Long at 145.696, Protective Stop at 144.667, Take Profit #1 at 146.700 (1:1) Risk/Reward, Take Profit #2 at 148.780 (1:3 Risk/Reward). Currently using the 15-minute chart for my entry and the 1HR and 4HR chart for my targets. Once 1:1 Risk/Reward is hit, my stop loss will move up to my entry.The justification is USDJPY gave us a nice strong bull candle off of the Support Zone and closed above the 1HR 30EMA (0900 EST). This last candle just closed with a large tail and near its high also above the 30EMA means the bears are failing to bring the price down. This is the follow-through candle giving us enough probability to enter the market.
More updates to come as they unfold!
Trade closed manually
Closed the trade manually at 145.250! USDJPY failed to break above the 4HR 30EMA and had a sell signal after several failed attempts on the 1HR at 10:00 EST. RSI has more downside room on the 4HR, we need the price action to bottom out near the Support Zone or previous low of 142.000 before entering the reversal trade to the upside.More updates to come as they unfold!
Trade active
Double Bottom on 15m. Longed 141.699, take profit 143.046, stop loss 141.027 for a 1:2 Risk/Reward. Lets keep a close on the candles since we're playing a low probability reversal on the 15m and a pullback on the higher timeframes!Trade active
The new support area has been tested 3 times increasing the probability that we pull back to the upside toward the previous low of 143.100! The RSI is still above the Moving Average and supporting the 2 leg pullback to the upside. We need to watch the next handful of 15m candles and few hourly candles closely for a failure to pullback. This could play out the candy cane shape up to the 1HR 30EMA at 142.500 or go to the 15m 200EMA at the Previous Support - New Resistance area.
More updates to come as they unfold!
Trade active
A nice strong bull bar closing near its high on the hourly chart! Let's see what happens here at the 30EMA.
Trade active
We've found some support above the 1HR 30EMA! Now we need confirmation and follow-through. RSI is still above the Moving Average and on the rise, but we do have to be careful after a bear drop, we're attempting to grab the bounce back up to the 200EMA which is a high reward/low probability trade.
More to come!
Trade active
We're knocking on the resistance line again! We closed above the 200EMA, a good first step. We need a close above that resistance line where the price action has failed twice. If we do, probability looks good for our target!
Let's see if the next update is a successful take profit for this trade!
Trade closed: target reached
Take Profit target of 143.046 hit!
We broke the 1HR 30EMA and the resistance line at 142.450, closed above, then demonstrated consistent support on the 1HR 30EMA until we broke up with a strong buy signal. With some minor pullbacks on the 15m, we remained bullish until the take profit was hit.
The key is we never received a sell signal or any indication that our bullish premise was invalidated. This trade resulted in a 135 pip profit!
Contrast this successful trade with the first in this analysis that we manually exited early. The bullish bias was invalidated with the multiple sell signals and failed attempts to break the EMA ribbons on the 1HR and 4HR. Followed by a strong bear bar, that was our queue to exit early with a 45 pip loss.
That gives us a net 90 pips for this effort! A fresh USDJPY analysis will be coming soon!
-Joe Dean
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