Hi Traders! USDJPY forecast update and follow up is here. On May 12th I shared this “USDJPY Forecast” in Trading View. 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!
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Now let’s summarize the idea first:
USDJPY – My idea here was as follows:
H4 – Price respected the keyformed by the 106 psychological zone, alternative , and the 61.8% (106.371) level of the first wave we have.
We also had a false break of the alternativeand the last low, .
The price has also broken above the downtrend line and has created higher highs.
H1 –pattern, currently it looks like a pullback is happening. hidden divergence.
Expecting further continuation higher after pullbacks.
On last Friday (May 15th) in the Weekly Trades Summary post I mentioned an update about this USDJPY forecast which is as follows:
“On the H1 chart we got deeper retraces and then the price is moving higher. Until the uptrend line (marked in blue line) shown in the screenshot below holds my view remains bullish here. If the price moves lower, breaks, and holds below this uptrend line then this bullish view will be invalidated”.
USDJPY H1(1 Hour) Chart Current Scenario
On the H1 chart, the price respected the uptrend line and moved higher again delivering 130+ pips move so far.
As you can see in this pair my view was bullish because on the H4 chart the price respected a key support zone, we had a false break, bullish divergence then the price broke above the downtrend line, and also it had created higher highs.
Also on the H1 chart, we had a bullish trend pattern so all these facts were supporting the bullish view. Based on all this my view here was to look for retraces and then further continuation higher.
The retraces that we were looking for happened but we had deeper retraces. This retrace happened in the form of two waves and we also had continuing bullish divergence so all these facts still supported the bullish view. But the most important fact is that the H4 downtrend line breakout was still holding. Then the price created double wave to the upside and was nearing the most recent uptrend line. This is when I updated on last Friday that this uptrend line would be our invalidation level because break below it would have become an opposite evidence in the form of an ABCD pattern followed by the most recent uptrend line breakout. But the price respected this uptrend line and moved higher perfectly as per my plan.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions”.
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