USDJPY: Resistance near YTD High of 105.43 Next Target
The medium term daily candle chart below shows the United States Dollar (USD) versus the Japanese Yen (JPY). This currency pair is known as USDJPY, and is trading around 105.07 around time of publication today.
Last time this pair was reviewed in the Ideas You Can Trade series, a breakout or reversal from within the trading range was discussed, as a close above 104.00 was mentioned as a potential catalyst for a bullish event, and as resistance near 104.00 approached.
After closing above 104.00 last week, USDJPY managed to breakout to the upside of the trading range it has be caught within for most of 2014, with the year-to-date high under 105.50 within close range now.
That high of 105.43 reached in early January appears to be the next upside target where USDJPY could again reverse as it did earlier this year, or more likely continue its now-bullish momentum even higher.
In addition, the long term bullish support line (point 4 in aqua color on chart below), can also be seen over a longer term perspective provided in the second daily chart below.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 105.22 with a Limit to take profit @ 105.43 and a stop-loss @ 105.03 Risk/Reward Summary: Limit risk = +21 pips profit / (-19) Stop-loss risk = Gain to Loss ratio = 1.10
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 104.32 with a Limit to take profit @ 104.01 and a stop-loss @ 104.62 Risk/Reward Summary: Limit risk = +31 pips profit / (-30) Stop-loss risk = Gain to Loss Ratio = 1.03
Medium term daily candle chart:
Medium term daily candle chart zoomed out: