FX Reversals: USDJPY False Breakout
- USDJPY attempts a breakout on news
- R4 breakouts begin at 124.14
- Range resistance starts at 123.95
USDJPY 30Minute Chart
(Created using Trading View Charts: Click on the chart below to zoom in; after zooming in, press the play button towards the right to set the market in motion)
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The USDJPY has opened today’s US trading session attempting to break higher on better than expected USD Initial Jobless Claims data for the month of July. Even though the news release came in better than expected, so far the USDJPY has been rejected at today’s R4 daily Camarilla pivot at 124.14. With prices now trading below today’s breakout pivot, traders may pause before looking to re-enter the pair’s primary uptrend. In the event of a fresh breakout, this would signal fresh bullish momentum on the creation of a new weekly high for the pair.
Alternatively, in the event of price returning back inside of today’s trading range, this morning’s breakout would be invalidated and labeled a false breakout. Today’s trading range measures 40 pips, and begins at the R3 pivot point found at 123.95. If price trades back inside of todays’ range, it would be considered a significant reversal and open price to test values of support including the S3 pivot at 123.55. A decline to support would also suggest that the USDJPY is setting up for a further reversal. A breakout below the S4 pivot at 123.36 would be counter to the daily trend, and suggest further weakness of the pair.
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---Written by Walker England, Trading Instructor
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