USD/JPY Analysis

In today's analysis, we're diving into the USD/JPY market to identify key levels, potential setups, and market structure insights. Our focus is on understanding the current bearish momentum and potential trade opportunities.

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Aug 20, 2024 - 13:06
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USD/JPY Analysis

1. Price Action and Market Structure:

The USD/JPY market has been displaying a series of lower highs and lower lows, indicating a clear downtrend. As seen in the 30-minute chart, price action has broken through significant support levels, which have now turned into resistance.

  • Support Levels: The first major support zone is around the 146.000 level, with a more substantial support at 145.500.
  • Resistance Levels: Previous support zones at 147.000 and 146.500 have now become critical resistance areas.

2. Bearish Continuation Setup:

The 4-hour chart shows a breakdown from a rising wedge pattern, which typically signals a bearish reversal. The price has broken through the lower trendline of the wedge and retested it, providing a potential entry for short positions.

  • Entry Zone: A retest around 146.500 presents a possible entry point for short positions, with a tighter stop above the recent high.
  • Targets:
    • TP1: 145.500
    • TP2: 144.500
  • Stop Loss: Above the 146.800 level to manage risk effectively.

3. Risk Management:

This setup aligns with the broader market structure, favoring a continuation of the bearish trend. Traders should ensure proper risk management by adjusting position sizes and setting stop losses according to their trading plan.

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Conclusion:

USD/JPY is currently providing a clear bearish setup with multiple confluences. Traders should watch for price action around the key levels mentioned, ensuring to stay disciplined with their entries and exits.

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Chart References:

  • Chart 1: Breakdown of key support levels on the 30-minute chart.
  • Chart 2: Rising wedge breakdown and retest on the 4-hour chart.
  • Chart 3: Bearish continuation setup with targets on the 30-minute chart.

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Disclaimer: Trading involves risk. This post is for educational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.

08/20/2024