In this article, we will share top-down trading technical analysis for the USDJPY.
On the monthly USDJPY chart, we can see that the pair is trying to break above the long-term falling trend line 112.400 level. This break, if it is to be confirmed on lower time frames, could lead to a retest of 118.247 in the coming months. By its nature it is significant.
The weekly USDJPY chart is revealing the first near-term resistance, 200 SMA (BLACKLINE) 113.243 level. We need to see weekly close above this level for an upside extension into the 118.247 level. By looking at whatever time frame pay attention to 110.870 level of the support in the case of a pullback from 112-113 zone. Place your alerts there.
By using our top-down trading technical analysis we have identified the key levels which will be your triggers for a trading strategy in this pair upon an important upside break of the long-term falling trend line. Preferred entry first is a short trade for a pullback into the upside support, within a possible rising wedge formation. Short at the market with the stop loss above the 112.850 targeting the 111.500, then a reversal long trade entry with the stop loss below 111.500 targeting 114 and higher.
Happy trading! (click on the chart to enlarge it)
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