After a nice uptrend, USDJPY has run out of steam. Been watching this for days expecting another bull continuation, but as the days pass, it seems more and more likely that bears are stepping in and that price could head lower.
I don't normally trade counter trend, unless the pair is range bound, and to me this could be interpreted as being at the top of the range.
Looking at this on the 4h chart, I can see an opportunity to play either outcome. Price is now in a 4h descending wedge pattern. It looks to me as though bears have slightly the upper hand here as price is now making lower-lows. However, the uptrend was very strong and this shouldn't be ignored. Price is just about touching above the Daily 8EMA which could provide support.
What to do? We use the descending wedge to create a OCO (one cancels other) order, so that we capture a breakout to either side.
A downside break may well find support at 102.89 (fib 38% retracement) so watch carefully.
A break to the upside could begin a continued bullish impulse leg.
Good luck.
I don't normally trade counter trend, unless the pair is range bound, and to me this could be interpreted as being at the top of the range.
Looking at this on the 4h chart, I can see an opportunity to play either outcome. Price is now in a 4h descending wedge pattern. It looks to me as though bears have slightly the upper hand here as price is now making lower-lows. However, the uptrend was very strong and this shouldn't be ignored. Price is just about touching above the Daily 8EMA which could provide support.
What to do? We use the descending wedge to create a OCO (one cancels other) order, so that we capture a breakout to either side.
A downside break may well find support at 102.89 (fib 38% retracement) so watch carefully.
A break to the upside could begin a continued bullish impulse leg.
Good luck.
Trade closed: stop reached:
The OCO order worked well, but my SL was too low. Putting my SL at the more conservative level of the recent swing high would have prevented this trade from being stopped out (just about!).
Perhaps a better entry would have been to wait and watch. After breaking out, price retraced higher again to retest trendline resistance, creating an evening star/bearish engulfing signal. This would have been a better entry.
Perhaps a better entry would have been to wait and watch. After breaking out, price retraced higher again to retest trendline resistance, creating an evening star/bearish engulfing signal. This would have been a better entry.