USDJPY Trading Setup

by: Colibri Trader

Dear traders,

In the past week, I have written about a few possible trading ideas. The latest one was the USDCAD. Although it showed some signs of hesitance, it is again on the right track. If you are in long positions, there are more bullish signs from a price action point of view to consider. The last two candles did engulf the body of the previous candle. This is showing bullishness and is willingness from the market participants to continue the buying in the days to come. I am not considering adding to this position, but the scepticism is washed away.

USDJPY Trading Setup

Today’s trading setup is coming from USDJPY. I have been looking at this pair for some time. If you remember, I covered it in this post talking about a possible reversal at around 112.00. The price is standing at 111.30 at the moment and the daily candle is a small bullish engulfing body. This is possibly the first indication of a minor/major reversal. I would be extra careful when approaching this pair considering the previous downtrend. Still, the signs are there and the lower timeframes are confirming it. For all of you that have taken my trading course, this would be a great place to start looking for fine-tuning a long entry. I will be following the price action at open and possibly looking for a long trade at 111.25. My stop-loss would be placed just under the lows at 110.55. My first target is the level of 112.00. The risk:reward is just 1:1, but this is because of the recent downtrend. If I see a breakout through the 112-barrier, this will free up some space for a larger move up to 115.50.

Happy Trading,

Colibri Trader

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