USD/JPY – The Dollar Pullback and the Bullish Yen

We may be nearing the time when the Dollar finally pulls back, and the Yen stops bleeding out. We have several data points in favor of this hypothesis:

  1. DXY's last 11 weekly bars have closed on higher highs, as shown in my analysis here, DXY - Another Week of Bull! DXY is overbought on the RSI, and has a gap to the weekly 9EMA that desperately needs to be closed with at least a minor pullback.
  2. JPY has formed a very nice descending wedge for the last 13 weeks and is losing steam to the downside. You can find my analysis on JPY here at JPY - A Bullish Pullback is Here
  3. USD/JPY's chart coincides with the analysis of the other two charts; we're nearing the top of the bull channel and the intersecting previous high at 152.000. Once this price area is hit, look for a strong pullback at least to the mid of the channel around 147.500, but could go as low as the previous bull high of 145.000. This seems like a clear area to take profits if you're in a long and get ready for at least a short scalp on the daily. The better approach may be to scalp some of your position at a 1:1 Risk/Reward and swing the rest to a 1:3 Risk/Reward to somewhere just above 145.000 unless a reversal signal presents itself along the way.

USD/JPY Pull Back Imminent


If you're in a long, look for scalps and swings on the lower timeframes, but be cautious at these levels. I would be looking for a good short entry at the top of the channel.


Trade wisely and let us know what you think in the comment section below!


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