Trade Setup
USD/JPY formed it narrowest daily range in over seven sessions yesterday as the market coiled beneath key resistance at 146.55.
As a general rule, the longer a market lingers near a key level, the higher the probability of a breakout. Whilst we did see some rejection of resistance during yesterday’s session on the 4hr candle chart (above), this was somewhat to be expected given yesterday’s low volumes in Europe. Should the market break above yesterday’s highs during today’s session, we would expect this breakout to gain momentum in-line with the dominant trend on the daily candle chart (below).
Risk management
Traders should be wary of false breakouts and place an order to enter above yesterday’s highs to help mitigate some of this risk. We also have U.S. economic data this afternoon in the form of Consumer Confidence (Aug) and JOLTS Job Openings (Jul). This data has the potential to cause increased volatility in U.S. dollar pairs.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
- Entry: Long at 146.82
- Stop: 146.19
- Target: 147.96
USD/JPY formed it narrowest daily range in over seven sessions yesterday as the market coiled beneath key resistance at 146.55.
As a general rule, the longer a market lingers near a key level, the higher the probability of a breakout. Whilst we did see some rejection of resistance during yesterday’s session on the 4hr candle chart (above), this was somewhat to be expected given yesterday’s low volumes in Europe. Should the market break above yesterday’s highs during today’s session, we would expect this breakout to gain momentum in-line with the dominant trend on the daily candle chart (below).
Risk management
Traders should be wary of false breakouts and place an order to enter above yesterday’s highs to help mitigate some of this risk. We also have U.S. economic data this afternoon in the form of Consumer Confidence (Aug) and JOLTS Job Openings (Jul). This data has the potential to cause increased volatility in U.S. dollar pairs.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
