Is it just me, or is USD/JPY gearing up for another move higher? Here’s the forex trade setup that I spotted!
As I tweeted yesterday, I bought USD/JPY at market as soon as the pair closed above 108.00. Aside from the break above a psychological level, I was also excited over the 100 and 200 SMA crossing over and signaling a possible start of an uptrend. The 1-hour chart shows us that the last two crossovers had heralded the start of strong trends this year (or at least in H2 2014).
On the fundamental front, I was also alerted to the news that U.S. equities traders are getting back their mojo. And with recent reports in the eurozone, the U.K., and New Zealand discouraging risk-taking, I’m pretty confident about the possible increase in dollar demand.
The cherry on top of my USD/JPY trade idea is the possibility that the BOJ might soon have to consider adding more economic stimulus. A Wall Street Journal report said that thanks to lower oil prices, the central bank is now looking at Japan’s inflation possibly falling back below 1%.I risked 0.5% of my account at 108.12 with a 150-pip stop loss and an initial target around the previous highs (110.00 area). I’m manually trailing my stop and considering adding to my position if USD/JPY rises faster than I initially expect.
What do you think of another USD/JPY uptrend? Are we just seeing a dead cat bounce, or is USD/JPY really ready for another move higher?
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.