On the fundamental front there’s just no bringing the Greenback down. Despite a weak final GDP reading and a couple of lower tier report misses, the dollar remains steady against the yen. The yen has also been relatively stable for the past couple of days especially since Japan’s positive economic reports are peppered with lingering concerns over consumption and wage growth. The main take-away from these reports is that they’re probably not enough to change the Fed and the BOJ’s plans anytime soon.
Is this why USD/JPY has been on a tight range lately? One look at the 4-hour chart tells us that the pair has barely broken above or below its 150-pip range since the start of the year. And with USD/JPY now hitting a major range support at the 101.30 area, you can bet your pips that a lot of traders are also paying attention.
Since my GBP/USD trade is still open, I think I can afford to wait for confirmation candlesticks before jumping on this setup. I’ll watch for Stochastic to turn back from the oversold region and maybe wait for a couple of bullish candlesticks at 101.30. A 100-pip stop would still give me a good risk ratio if I aim for the range resistance at 102.75.
That’s the plan for now! What do you think? Is this something you would take for yourself?
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Thanks and have a great trading day!