Trade idea: USDJPY at channel resistance, potential for a correction

The USDJPY currency pair reached the 111.50 channel resistance zone today and has retraced back off it since then.

This is the third attempt at this resistance trendline after the previous attempts resulted in 100+ pips bearish moves. The Stochastic oscillator on the 4-hour timeframe has also reached the overbought territory and completed a bearish crossover.

The fundamentals remain unclear for USDJPY, with solid economic growth in developed economies dragging it higher while risks such as trade wars and geopolitics are dragging it lower. USDJPY could easily nose dive by 100 pips again in case of any news headlines that hurt risk appetite.

The lower border of the channel (support trendline) is around 110.30 and can be used as the target for a potential short trade here. Note that 111.00 is also an important level for the pair and could/will provide support.

USDJPY

 

USDJPY Current Trading Positions

Sell 75%
Buy 25%
100.0%75.0%07580859095100
Avg Sell Price 111.06
Avg Buy Price 111.32
Liquidity Distribution
109.30110.88112.50SellBuy

 


 

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