USDJPY: June 2007 high of 124.18 surpassed as uptrend brings pair to 124.45 today - a fresh 12-year high
The daily candle chart below shows the medium term price history of the United States Dollar (USD) versus the Japanese Yen (JPY). This currency pair is known as USDJPY, and is trading near 124.02 around time of publication - and higher for nearly the sixth straight trading day as JPY weakness is a driving theme this week.
Already this week on Monday in Ideas You Can Trade USDJPY was described as in an uptrend and approaching resistance near 122.00, and how a break-above that line would be bullish.
The pair has since risen sharply after pushing above 122.00 where the June 2007 high above 124 was surpassed and a higher-high reached today on 124.45 - a fresh twelve-year-high.
This very bullish sign from both a short-term and long-term perspective could mean that 130.00 may be the next medium-term target even if the pair pulls-back from current levels before moving higher again.
The additional Monthly candle chart below shows a steeper channel (within an already steep bullish channel) where 130.00 would coincide near the upper line of the less steep bullish channel (point 3 on longer term chart below).
For now a break above today's high could be an entry point for bulls whereas a failure to sustain 1.24 could be briefly bearish. Either way, Yen weakness has returned with a vengeance as USD strength attempts to make a sustained comeback.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 124.46 with a Limit to take profit @ 125.99 and a stop-loss @ 122.90 Risk/Reward Summary: Limit risk = 153 pips profit / (-156) Stop-loss risk = Gain to Loss ratio = 0.98
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 123.45 with a Limit to take profit @ 123.04 and a stop-loss @ 123.80 Risk/Reward Summary: Limit risk = 41 pips profit / (-40) Stop-loss risk = Gain to Loss Ratio = 1.02
Short Term Daily Candle Chart:
Long Term Monthly Candle chart: