Strategy Video: Is This a Tradable USDJPY Breakout?
• USDJPY broke below a 16-month rising trendline today, raising the potential of a reversal
• A similar technical break from GBPJPY recently ended with a return to range
• Without other yen crosses and risk trends to back a breakdown, such a trade setup is risky
Do you expect a bigger breakout for the Japanese Yen crosses is coming but don't want to avoid the risk of individual pairs? Use the Mirror Trader Currency Baskets to place a trade.
A swell in volatility and the bearish break of a 15-month rising trendline has anxious traders wondering whether USDJPY has put in for a major breakout. Having been starved of medium-term - and higher - trading opportunities over the past months, there is a keen desire for a bigger move to take root. However, this is an enterprise of probabilities, and the circumstances around this move present a number of red flags. First and foremost, meaningful breakout and trend development have been difficult to secure. Furthermore, there is a lack of confluence from other yen crosses that have carved out similar technical patterns and risk trends have yet to mark a critical break. Is this a trade to take now? What developments would improve its tradability? We focus on this USDJPY setup in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.