USDJPY TRADE PLAN – MAY 21 BIG BREAKOUT AHEAD?USDJPY TRADE PLAN – MAY 21 | FED HAWKISH BUT YEN STAYS WEAK – BIG BREAKOUT AHEAD?
USDJPY is entering a critical technical zone as the market weighs the Fed’s persistent hawkish stance against Japan’s passive approach to the Yen’s depreciation. After a strong rally, we are seeing a potential exhaustion with key levels in play.
🌍 MACRO CONTEXT:
FED remains hawkish: Officials continue to support higher-for-longer interest rates to tame inflation → USD remains firm.
Bank of Japan silence: No signs of FX intervention or rate policy shift, causing ongoing weakness in JPY.
Risk sentiment neutral: Risk-off flows are muted; USDJPY remains trapped in a wide range – awaiting macro catalysts.
📊 TECHNICAL OUTLOOK (H2 CHART):
Price is now correcting within a falling channel.
Price broke below the MA200 and rising trendline, now retesting a key support zone at 143.77.
The current range 141.99 – 144.71 is critical – a breakout from either end may dictate the next medium-term direction.
🎯 TRADE SETUPS FOR TODAY:
✅ SCENARIO A – SELL THE RALLY (PRIMARY BIAS):
If price rejects 144.71:
SELL ZONE: 144.70 – 144.71
SL: 145.10
TP: 143.77 → 143.30 → 142.50 → 141.99
→ Key resistance area – price may trigger strong seller interest.
✅ SCENARIO B – SELL ON BREAKDOWN:
If price breaks 143.77 and retests:
SELL ZONE: 143.60 – 143.70 (post-breakdown entry)
SL: 144.10
TP: 142.50 → 142.00 → 141.99
✅ SCENARIO C – SHORT-TERM BUY (LESS FAVORABLE):
If price reacts positively at 141.99 with bullish confirmation:
BUY ZONE: 141.90 – 141.99
SL: 141.50
TP: 142.50 → 143.00 → 143.77
→ Only take this setup if strong reversal signals appear.
🔑 KEY LEVELS TO WATCH:
Resistance: 144.71 – 145.00 – 148.44
Support: 143.77 – 143.30 – 141.99 – 141.20
📌 FINAL THOUGHTS:
USDJPY remains in a volatile consolidation zone, pressured by a hawkish Fed but lacking JPY strength. Watch for PMI data and Fed comments this week for directional cues. Until then, respect the current range and trade with discipline.
📣 Bias favors SELL from 144.71 unless buyers reclaim full control – trade the reaction, not the prediction!
