Inflation is the key driver for the current massive uptrend in the USDJPY! With the price hitting 125.000 psychological level resistance last couple of weeks ago, it has since failed to close above 125.000 on the monthly timeframe. At the moment the price hovering just beneath this key level. The current consolidation suggests the market is awaiting an impulse to be injected by the FED and how it deals with the current ongoing inflation crisis. More and more FED rate hikes would probably cause USDJPY to head much higher towards the 130.000 region in the coming months. With the fundamental factors strongly in support of the USD and against the JPY, we can expect this pair to head higher towards its next target of 130.000 region. However looking at the two factors that might prevent this move from happening/ prevent the prices from getting beyond 130.000 resistance:
1) The price has been aggressively climbing since the end of delta covid variant ended. Meaning its kind of oversold and might likely consolidate before heading higher.
2) The bank of japan would likely intervene and prevent the YEN from slipping further.
These two factors might prevent the USDJPY from heading beyond 130.000. In other words the prices might start falling after 130.000. However if we are looking to take this trade LONG, the main criteria that must be met would be for the monthly candle to close above 125.000 psychological resistance first. This would give us extra ideal confirmation that price is ready to head higher. Once this happens a long trade can be executed with the following details:
TRADE TYPE: LONG SWING TRADE
STOP LOSS: BELOW SWING LOW @ 114.500
TAKE PROFIT: 129.000
ENTRY: 121.500 (FOR BETTER RR OF 1:1) Therefore we must await retracement before going long.
Note: Shall the TAKE PROFIT HIT FIRST BEFORE THE RETRACEMENT TO DESIRED LEVEL THEN THE TRADE WOULD BE INVALIDATED!
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1) The price has been aggressively climbing since the end of delta covid variant ended. Meaning its kind of oversold and might likely consolidate before heading higher.
2) The bank of japan would likely intervene and prevent the YEN from slipping further.
These two factors might prevent the USDJPY from heading beyond 130.000. In other words the prices might start falling after 130.000. However if we are looking to take this trade LONG, the main criteria that must be met would be for the monthly candle to close above 125.000 psychological resistance first. This would give us extra ideal confirmation that price is ready to head higher. Once this happens a long trade can be executed with the following details:
TRADE TYPE: LONG SWING TRADE
STOP LOSS: BELOW SWING LOW @ 114.500
TAKE PROFIT: 129.000
ENTRY: 121.500 (FOR BETTER RR OF 1:1) Therefore we must await retracement before going long.
Note: Shall the TAKE PROFIT HIT FIRST BEFORE THE RETRACEMENT TO DESIRED LEVEL THEN THE TRADE WOULD BE INVALIDATED!
Cheers, I hope you find this insight helpful. Please LIKE & FOLLOW for more insights into Major & Minor currency pairs
