USD/JPY – The Pair May Keep Rising Due to the Hawkish Remarks From Fed Chair
Risk per trade is 0.75%
Make sure to take these trades before Thursday, 5 PM JST
Bearish View
- Wait for a bearish price action reversal on H1 timeframe and place trades once price reaches ¥138.39 or ¥139.00.
- Stop loss – 1 pip above the local swing high.
- Adjust stop loss to breakeven once the trade is in profit by 20 pips.
- Take profit by removing 50% of trade.
- Let the trade run.
Bullish View
- Wait for a bullish price action reversal H1 timeframe and place trades once price reaches ¥137.39, ¥137.06, or ¥136.53.
- Stop loss – 1 pip below the local swing low
- Adjust stop loss to breakeven once the trade is at profit by 20 pips.
- Take profit by removing 50% of trade.
- Let the trade run.
The Fed Chair’s testimony has made the USD/JPY pair more bullish than before which can be seen by looking at the charts. Powell stated that the Fed will move forward with aggressive interest rate hikes at a faster pace than what we had expected earlier. This resulted in the DXY breaking above 105 alongside the US Dollar getting a boost. The strong USD did make the Japanese Yen lose its ground, but it is still doing better in comparison to other currencies like GBP and AUD.
It looks like the rate hikes hinting at the increased chances of an upcoming recession is giving some support to the JPY. So, the general risk-off sentiment is there. However, the bullish trend may not be too strong even though going long would be the best course of action at the moment. A bullish reversal might be the most probable outcome based on the current situation which makes the overall outlook bullish for the pair.
