USDJPY: March 10th high of 122.00 nearing as trend brings pair towards upside of recent trading range
The daily candle chart below shows the medium term price history of the United States Dollar (USD) versus the Japanese Yen (JPY). This currency pair is known as USDJPY, and is trading near 121.48 around time of publication - as holiday trading hours affected a number of markets this Monday.
At the end of last month in Ideas You Can Trade, USDJPY was trading within the lower support line of a recent range (where a reversal from the support line was described) and resistance near 122.00 was mentioned as an upside barrier (the upper part of that trading range).
Since then - the low hit on April 30th was the most recent bottom where USDJPY has since ascended higher towards current levels - and where it is now nearing 122.00 - just above today's session high of 121.76.
In addition, resistance near current levels of 121.50 has also influenced sellers in recent months, keeping the pair range-bound. Therefore, if the uptrend continues and 122.00 is breached to the upside, then a higher-high should follow, whereas if support is lost around 121.50 then a sharp reversal back into the above mentioned range could follow (and if 121.00 is lost).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 122.08 with a Limit to take profit @ 122.39* [post-publication corrected from 121.39 to 122.39*] and a stop-loss @ 121.84 Risk/Reward Summary: Limit risk = +31 pips profit / (-24) Stop-loss risk = Gain to Loss ratio = 1.29
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 120.99 with a Limit to take profit @ 120.59 and a stop-loss @ 121.35 Risk/Reward Summary: Limit risk = +40 pips profit / (-36) Stop-loss risk = Gain to Loss Ratio = 1.11
Medium Term Daily Candle Chart: