USDJPY SHORT – A first re-test on the 5 year high!

DISCLAIMER: I am not a financial advisor nor certified analyst and definitely not a pro trader. All contents discussed on this blogpost are solely my own personal views and for Trading education/entertainment purposes only. Forex/FX Trading is extremely risky where losses can exceed deposits. Enter with discretion. Do your own research and due diligence. The basis of this trading analysis is purely technical in nature.

Hello once more. I have decided to create my second Finlogix technical analysis for the USDJPY FX pair.

Not so long ago, last January within this year 2021, I have created a long trade plan for the Greenback against the Yen with a risk:reward ratio of 2. Luckily, it was a hit and I am proud to say as one of my winners! You can review its trading plan details on my profile.

I have also mentioned in my previous Nikkei long analysis about some insights for the USDJPY citing it as one of the key movers last week.

I totally understand that quicker time frames can offer much safer risk protections but I prefer to use the USDJPY monthly chart this time to explain what I am seeing on the macro side of trading.

In fact, using the monthly time frame gives me a clearer view of the pair’s price action in the long term scenario.

I will give credit first for the USDJPY buyers being able to push the price to a fresh 3 year high! To be more conservative, the 115 mark is a juicy sell zone already but I speculate that the buyers are still not done yet. After breaking the 2 year resistance found at the 112 mark (50% Fib retracement), the USDJPY is still bullish on the monthly chart based on its monthly RSI!

Once the weekly correction is through, I am convinced that 112 now is a flipped S/R and next target will be the 115.50 (61.80% Fib retracement) which we can have a bullish extension possibility towards the USDJPY’s 5 year high!

I have also layout my monthly Elliot waves theory and looks like ABC correction is done last December 2020 to January 2021 double monthly candles followed by a fresh motive phase. From my Wyckoff’s perspective, we are still consolidating which I highlighted the range bounds in blue rectangle and might trigger for a re-accumulation mode.

If my analysis is correct, the monthly RSI can also re-test upward levels to support confluence from what I am seeing.

My USDJPY short entry will be the said 5 year high (double top monthly candles) set at the 118.60 mark. Take profit will be at the anticipated flipped 112 S/R which will become a very strong demand zone. The stop loss will be strictly observed at the 122 mark in case of an overbought scenario.

Overall the risk:reward score for my second USDJPY trading plan will be 1.941.

I hope this one makes another winner for me.

Good luck! Thanks a lot for reading my latest Finlogix analysis. I do hope you find my insights informative. Cheers!