USDJPY is setting up for a long trade based on two Elliott wave triangles, which is a condition we refer to as an “Elliott-hedged” situation. This is a scenario whereby two or more correct Elliott wave formations, despite being different bigger-picture counts, both point to the underlying market heading to the same price level in the near term.
This situation is currently in play for USDJPY, with a pending triangle break setting up potential long positions.
Developing Long Set-up in USD/JPY
- Trade: Buy USDJPY at 102.30
- Stop loss: Place stop at 101.90
- Price targets: Remove half the initial position at 102.75, letting the remainder run to the second target at 103.15
- Trade management: Move the initial stop loss to 102.35 if price reaches 102.75
By Todd Gordon, founder, TradingAnalysis.com
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Disclaimer: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors.
