USDJPY has started to form a bullish exit, time to start buying to play the breakout.
Buy above 105.85. Stop loss at 105.40. Take profit at 107.09.
Reason for the trading strategy (technically):
Price has started to break out of our descending resistance-turned-support line signalling that a change in momentum should be expected. We look to buy above major support at 105.85 (Fibonacci retracement, horizontal overlap support, breakout level) for a push up to at least 107.09 resistance (Fibonacci retracement, horizontal swing high resistance). We do have to be cautious with our immediate resistance at 106.44 (Fibonacci retracement, horizontal overlap resistance) which needs to be broken to open a further bullish recovery.
RSI (34) sees descending resistance which coincides with our resistance at 106.44. A break above our descending resistance needs to occur before a further rise can be expected.
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Desmond Leong provides technical analysis to the largest banks, hedge funds, and brokers whilst coaching hundreds of aspiring traders. He specializes in providing actionable and accurate analysis that utilizes the most advanced theories.
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