USD/JPY Strategy: Major Trend Change in Progress?
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- Strategy: Long USD/JPY at 113.09
- US Dollar poised to extend a three-week uptrend vs. Japanese Yen
- Large-scale trend reversal may be underway on key trend line break
The US Dollar appears poised to test two-month highs above the 114.00 figure against the Japanese Yen after prices extend a three-week rally. The pair has broken resistance guiding the broad down trend since mid-December 2016, hinting that a major upward reversal may be in progress.
From here, a daily close above the May 11 high at 114.37 opens the door for a test of the 38.2% Fibonacci expansion at 115.44. Alternatively, a reversal back below the 23.5% level at 112.65 sees the next downside barrier at 111.86, a former resistance level now recast as support.
Seemingly attractive risk/reward parameters reinforce a compelling technical setup and a long USD/JPY trade has been activated at 113.09, initially targeting 114.37. A stop-loss will be activated on a daily close below 112.65. Profit on half of the trade will be booked and the stop moved to breakeven once the first target is met.
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