Market Condition: Pending Breakout
Target 1: 100% of Daily ATR
Target 2: 200% of Daily ATR
Invalidation: Continued Consolidation
USDJPY 1Day Chart
(Created using Marketscope 2.0 Charts)
The USDJPY is working on its fifth daily close inside of August 12th’s bearish daily candle. As consolidation continues, traders may begin looking for a breakout using the reference candles high and low for values of support and resistance. A breakout above 125.28 would be considered a bullish break back in the direction of the USDJPY’s predominant uptrend. Conversely a bearish breakout below 123.78, would open the pair to move on towards lower lows. In the event of either breakout, ATR can be used to project potential profit targets. Current daily ATR equals 66 pips and can be added to an entry in either scenario.
Alternatively, if prices fail to breakout, this opens the USDJPY up to further consolidation between the aforementioned values of support and resistance. This would tentatively delay the execution of any breakout based entry orders.
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