USD/JPY Pending Daily Breakout
Market Condition: USD/JPY Pending Breakout
Target 1: 1X Range Bullish 120.21 Bearish 115.46
Target 2: 2X Range Bullish 121.76 Bearish 113.91
(Created Using TradingView Charts)
The USD/JPY has advances rapidly this week after Wednesday’s FOMC rate hike, however the pair has failed to breakout to a new high or low this Friday. This has left the pair set to close the week with the creation of an inside bar. This means traders may use Thursday’s daily candle as a reference to produce values of support and resistance for an eventual breakout. Traders may elect to look for bullish breakouts with the prevailing daily trend above Thursday’s high of 118.66. Alternatively, a contra trend bearish breakout may be signaled beneath Thursday’s low of 117.01. In either scenario, traders may extrapolate a 1X extension of the 155 pip range to find preliminary pricing targets. This places initial bullish targets near 120.21 and bearish targets of 115.46.
In the event that a breakout occurs next week, traders may use this range for managing risk. In the event of a false breakout traders may consider using ½ the distance of the identified range (77.5 pips) to create an initial 1:2 risk reward ratio. Alternatively in the event that the USD/JPY fails to breakout, traders may consider temporary range based positioning.
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