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The USDJPY is trading at its lowest level since October 19. More importantly, the pair is currently hanging 50 pips below the 113.15 handle. It’s a level we’ve discussed several times in recent weeks.
Update: Over the past two hours, buyers have pushed prices back to 113.15.
However, until we get a session close (5 pm EST) below 113.15, it’s too speculative to call one way or the other. For all we know, USDJPY bulls could turn this into a bullish pin bar before the New York close.
One reason I’ve been favoring the USDJPY is due to the technicals. The horizontal levels of late are easy to identify, making it ideal for trading the ranges.
I’m going to wait for today’s close to get a better feel for whether buyers or sellers are in control. A 5 pm EST close below 113.15 would suggest a move lower toward the 111.60 area and perhaps 110.20.
Alternatively, a daily close back above 113.15 would carve a long-tailed bullish candle. It would signal that buyers remain in control and re-expose 114.35 resistance. A close above that would pave the way for a move toward 115.40.
An indication of strength or weakness here could spill over into other yen pairs. Keep that in mind if you have yen exposure or plan to in the near future.