I entered long USDJPY at 81.09 as it followed up a bullish Piercing Line candlestick pattern with a break through falling channel resistance established from April’s swing top. I am expecting prices to rise along with US Treasury yields as the Federal Reserve allows QE2 to expire in June against a backdrop of increasing fiscal stress in the United States, pressuring borrowing costs higher. I am initially targeting 81.83, the 38.2% retracement of the 4/6-5/5 decline. A stop-loss will be activated on a daily close below 80.74.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
