USDJPY: Week Wraps Up With Support off 102.00 on Today's Low
The medium term daily candle chart below shows the United States Dollars (USD) versus the Japanese Yen (JPY). This pair is known as USDJPY, and finished off the week closing near 102.13 after support was found on today's low of 102.00 - a key static support line.
In recent weeks the pair was ranging between a previously drawn 0% and 23.6% Fibonacci line, and with the 102.00 horizontal support near the middle of these two points. If support on 102.00 holds, then the pair may bounce back up, whereas if it fails then at least the support near the 23.6% level which coincides near 101.00 could be next.
These two upper and lower ranges that the pair had traded within in recent months were previously discussed in the last post about USDJPY in the Ideas You Can Trade series, afterwhich the 23.6% line provided the needed support to reverse a short term bearish momentum that occurred. Therefore, much attention may be given to what happens around 102.00, in order to determine the next move.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 102.33 with a Limit to take profit @ 102.79 and a stop-loss @ 101.89 Risk/Reward Summary: Limit risk = +46 pips profit / (-44) Stop-loss risk = Gain to Loss ratio = 1.04
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 101.68 with a Limit to take profit @ 101.21 and a stop-loss @ 102.08 Risk/Reward Summary: Limit risk = +47 pips profit / (-40) Stop-loss risk = Gain to Loss Ratio = 1.17
Medium term daily candle chart: