The USD/JPY has been bearish in March after making a high on the year around 122, which broke above the 2014-high around 121.70. Let’s take a look at a couple of trade ideas.
At 120.50: The 4H chart shows that the market is about to challenge a falling trendline coming down from 122 as well as the 100-period SMA, if USD/JPY pushes to 120.50 in the upcoming session. Here we might expect a near-term to short-term resistance, one that is within a session or two. We can look to sell around 120.50 but we should be aware of the prevailing uptrend since 2011, so we would want to limit this bearish outlook to the very short-term. To the downside, 199.50 is a sensible target.
At 119.50: In fact, if price reaches the 119.50 area, we can consider buying, with the idea that USD/JPY is still bullish and that this week’s rally so far is at least going to reverse a significant part of the decline in March.
This is also a short-term trade plan, but it is aligned with the long-term uptrend. Still, if we want to be conservative on the target, let’s keep the 121 handle as a possible target in case USD/JPY is still in consolidation ahead of the NFP. We might need to see what happens after this Friday to have a trading idea outside of the intra-session and intra-week time-frame.
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