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Today we saw USDJPY make another run at the April highs at 104.10. The pair was also able to overcome trend line resistance from the August 25th high and in the process formed a bullish pin bar.
It’s important to note that the next leg up won’t be set into motion until this market is able to overcome 104.10. Having said that I do expect the 103.94 area to act as support early next week.
Not only is this former trend line resistance, but there are also several touches off of this level on the 4 hour chart over the past week.
Summary: I certainly like this market higher and I do think that the 103.94 area could present a buying opportunity early next week. For those who are a bit more conservative, waiting for a daily close above 104.10 would be more prudent. However keep in mind that this market had been consolidating for the entire year, which means that the next leg up could happen just as quickly as the breakout on August 19th.
Another market that I’m bullish on is USDCAD. Ever since the breakout from trend line resistance on July 25th, this market has had the look of a market that wants to move higher.
I mentioned a few days ago to keep an eye on the 1.082 level to act as support. Sure enough the market tested that level today and formed a bullish pin bar in the process.
Summary: Potential to enter long on a 50% retrace of Friday’s bullish pin bar. Possible targets would be the August highs at 1.098 and a key level from earlier this year at 1.104.
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