USDJPY: Buying Opportunity at the Support

Yesterday, I wrote about a possible buying opportunity in the hourly charts. In that post, you can read about a possible reversal based on the daily chart .

Now, let's look at the 1H in order to see possible bullish signals, which can be used for opening long positions.

The price formed a bullish divergence with RSI and MACD lines. It is a strong reversal signal. The price broke the local downtrend line, and it gives another bullish signal. MACD histogram and lines are supporting a possible upward movement. DMI is bearish , but ADX line is moving down. It tells us that sellers are not so strong right now, and it is another signal which allows us to open long positions.

If the price breaks SMA50, it will be possible to open long positions with stop orders below the local swing low and 105.00 support level . It is possible to place stop below 104.650 as the alternative. Profit targets should be at SMA200.

Here is an example of a long trade:
Buy above 105.225
Stop below 104.750
Profit Target at 106.350

Risk per trade must be no more than 1-2% from the capital.



Disclaimer!
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.

Comment: The price moved in our direction, but before it had reached the stop. The fake breakout could be used as an additional buy signal.