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This setup is looking for trend resumption in USD/JPY, and with FOMC minutes set to be released later today, drivers exist in the near-future for USD-plays.
We discussed the prospect of trend resumption in USD/JPY in this morning’s Market Talk article, entitled FOMC Minutes, BoC Rates and USD/JPY Bulls Re-Emerge. This is a setup designed to play the continued re-emergence of bulls in USD/JPY. If bullish price action doesn’t continue, I want this trade stopped-out quickly so that I don’t have to sit in an adverse excursion scenario while USD/JPY trends against my position. Chinese debt was down-graded last night and there was a minimum of risk aversion around that event, so the possibility of continued or pent-up risk aversion certainly still exists, and stops will be set in order to mitigate that damage.
Entry at Market
Stops @ 110.61
Break-even stop move at 113.00
First target 113.50
Second Target 114.15
Third Target Open (looking for 115.00 test)
Chart prepared by James Stanley
--- Written by James Stanley, Strategist for DailyFX.com
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