Forex Setup: USD/JPY’s Short-Term Range

Now that traders have mostly priced in the Fed and BOJ’s plans, it’s no surprise that USD/JPY is stuck in a range. What do you think of this forex setup?

USD/JPY 1-Hour Forex Chart

USD/JPY 1-Hour Forex Chart

Looking at the 1-hour chart, we can see that USD/JPY has been stuck in a 130-pip range for more than a week now. More specifically, it has been finding support at the 117.40 handle several times. I’m thinking a 50-pip stop loss would be a good idea if I buy at another test of the support.

I’m comfortable buying the dollar some more because the Fed’s recent policy statement hinted that the central bank is still on track to tighten its policies despite the ECB’s decision to implement a QE program for the first time.

On the other side of the trade, today’s weaker-than-expected Japanese inflation numbers just put more pressure on the BOJ to deliver better results on their stimulus programs. Speculations of more BOJ easing wouldn’t hurt a long trade at this time.

I’m thinking of risking 0.5% of my account around the 117.40 area once Stochastic hits the oversold zone. I could place a 50-pip stop loss and aim for at least the 118.00 handle, if not the 118.50 range resistance.

What do you think? Will we see enough catalyst to move the currency pair around and hit those levels?



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  • Prem Kumar

    good idea

    • Hucklekiwi Pip

      Thanks! Are you in on any USD or JPY trades, too? 🙂

  • smartfx921

    You are predicting and hoping that the market will move up as per your prediction. I don’t trade with Indicator.Market is in the ranging. Market has touched several time on the 117.40 level and it may break the support this time…nobody know the market. As you can see the chart provided by you the Bull strength is getting weaker as bull could not reached 118.70 level and start turning. Let the market show you the direction.Don’t take the risk and decide too early. Watch the market movement. Don’t depend too much on the indicator. Price action is the key. Happy Trading!

    • Thanks for your tips. Much appreciated! Good point about the ranging market and waiting for price to show me the direction. Looks like it just broke the range. Do you think it will continue on to retest last year’s highs?

      • smartfx921

        Yes, price may retest at last year high. However, bull is a litter weak as it could not make above 120.50 level. Still below previous high. Do not rush to enter the trade. You may want to look at higher time frame to collect more info.

  • Daniel

    I should pay attention on this. That could be a 50 pips times 2 or 3 win. The peak getting lower but I am placing one more 50 pips play.

    • Are you still on the trade? The pair did find support (after hitting my SL though) and is now in the 119.50 area. 🙂

  • Marco

    Down 70 pips on Feb 1st afternoon. Your stop just got taken out

    • Yeah I probably shouldn’t have kept the position open over the weekend. Something to remember in my next trades!

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