USDJPY has confirmed a on the 4-hour timeframe.
The potential reversal zone (PRZ) is comprised of 3 ratios:
0.886 XA retracement at 111.652
2.24 BC projection at 111.563,
1.618 alternate at 111.647.
Stop loss is set at the 1.13 XA projection, or 112.188.
Take profit is set at two levels, management and final.
The management level is the 0.382 XA retracement, or 110.907.
The final level is the 0.886 XA retracement, or 110.449.
Overall risk to reward ratio for this trade is 2.19.
The terminal price bar has already formed, confirming all three ratios. Also, on has reached overbought territory on the 4H timeframe.
Although the technicals are all good, the fundamentals may be a bit more blurry. Many recent economic indicators published for the US have been positive, likely due to the hold off on interest rate rises from the . With this, we could see an increase in aggregate demand for goods and services in the US, and as a result of this, to meet up with the increased consumer demand, producers may increase job openings as well. This will be important considering the JOLTS Job Openings report coming out in a few days. Therefore, should the report come out with greater job openings than expected, I may decide to hold off on the short position and watch the market reaction first. However, a report with fewer job openings than expected will only be good for our short position.
As always, watch price action first to confirm a move before entering!
Thanks for reading,