You’ve seen how the USDJPY has been trading in the last few months, it’s been going up and up and up without looking back.
Since February though, it reached an important resistance level (read it “zone”), and its been ranging since then.
Let me show you the 4H chart:
Since the first days of February, when the USDJPY reached this resistance level at 93.80, it started to trade in that range (green levels), has been difficult to break either extreme of the range.
But we cant expect the USDJPY to trade in between these two levels for ever right?
So again, why is it at a critical level?
Take a look at the hourly chart (zoomed out to see the importance of the level):
Now you see what I’m talking about right?
It is trading just above 94.35, which is the critical level I’m taking about. If the USDJPY keeps trading above this level, I’d consider opening a long trade, without a doubt.
Take profit level
No analysis is complete until we know where to take profits (or when to stop looking for long opportunities).
In this case, I’ll use the weekly chart to determine my next LT resistance level:
Clearly the next LT resistance level is just below the 100 mark, at 99.10.
So this is my trading plan for the USDJPY:
If the USDJPY keeps trading above 94.35 I will look for my entry in the short term charts, and will keep looking for long opportunities until it reaches the next LT resistance level which is at 99.10.
All TP orders will be set below 99.10
What do you think about the USDJPY?
What other pairs are you currently monitoring? Any open trades?