Hi everyone! My forex pick for today is the US dollar against the Japanese yen (USD/JPY). If you notice, the currency pair has declined by more than 4% after setting a 4-year high of 103.73 last month as seen in the daily chart above. Based on my technical analysis, the USD/JPY could continue to go down until it finds some support at the 6-month uptrend. A tap and a successful bounce from this level could propel the pair to retest the 103.73 resistance (4-year high) and eventually surpass it when the right time comes. However, on a bearish note, a failed bounce and a breakdown from the 6-month uptrend could slide the pair to the next support at 97.00.
The current chart setup is an excellent trading opportunity for me since I can capitalize on the risk to reward by buying as close to the 6-month uptrend and placing my stop loss at its breakdown. There’s a chance I could lose this USD/JPY trade but above all, as long as the uptrend is intact, I remain bullish on this. Remember, the trend is your friend. Wish me luck!