Hi Traders! USDJPY forecast follow up and update is here. On January 6th I shared this “USDJPY Forecast And Technical Analysis” post in my blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea:
On the H1 chart, we could see that the price has created a bullish divergence between the first low that has formed at 102.957 and the second low at 102.601 based on the moving averages of the MACD indicator, we may consider this as evidence of bullish pressure. In addition to this, based on the Parabolic Sar we could see that the dots are below the price which we may consider as another evidence of bullish pressure. We also have a good downtrend line that has formed, if the price breaks and holds above this dynamic resistance we may then consider it as a validation for the bullish view and may expect the price to continue higher further.
USDJPY H1(1 Hour) Chart Current Scenario
On the H1 chart, the price action followed my analysis exactly as I expected it to. The price was in a key support level, we had a bullish divergence in play, and based on the Parabolic Sar the dots were below the price, which we considered as evidences of bullish pressure. Also, I mentioned that “we have a good downtrend line that has formed, if we get a valid breakout above this downtrend line we may then consider it as a validation for the bullish view”. The price which was moving higher provided a valid breakout above this dynamic resistance, which we may consider as a validation for the bullish view. We then had a pullback, but the downtrend line breakout was holding and most importantly there were no signs opposing this bullish view. The price then moved higher further, and has delivered 80+ pips move so far.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
Currently, on the H1 chart, we have a bearish divergence in play based on the MACD indicator. This is something that we need to pay attention to. So if you are still involved in the buys then this is a good place to consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
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So traders when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This USDJPY forecast is yet another good example of this scenario.
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To your success,
Vladimir Ribakov
Certified Financial Technician
