- USD/JPY forms a reversal pattern at 150
- Trading signal should last 2-3 weeks with a potential of 1:3 rr ratio
- USD/JPY trades at BOJ intervention levels
- Sell USD/JPY
- Entry price: 149
- Stop loss: 152
- Leverage: 3x
- Take profit 1: 145
- Take profit 2: 142
- Take profit 3: 140
- Timeframe: 2-3 weeks
- Risk-reward ratio: 1:3
USD/JPY rallied since the start of 2023; not even the regional banks’ crisis in the US in March could stop it. Now, it trades near the 2022 highs and at levels where the Bank of Japan intervened.
The upside move following a contracting triangle resembles a terminal pattern. Such patterns form at the end of impulsive waves and signal a major top or a bottom is near.
Japanese Yen fundamentalsThe JPY was sold aggressively because the Bank of Japan kept a dovish bias. But now the weakness has reached levels where the central bank reacted in the past, hinting that it is unwilling to tolerate it.
USD to JPY trade idea takeaways- The risk-reward ratio is an attractive one given that USD/JPY stretched so high
- I’m expecting the decline to happen much faster than the upside
- Once it stretches to 140, more downside is possible
- A move to 152 would invalidate this scenario
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