USDJPY seems to have found a strong level of resistance after having an uptrend on the daily chart. The price has been bearish for the last two days. Thus, the H4 chart looks good for the sellers. Moreover, the reversal candle was a daily bearish engulfing candle. Thus, the price may head towards the South with good selling pressure. Let us have a look at the H4 USDJPY chart.
This trade idea was generated by our powerful Elite Swing Trader System.
The price after being bullish had a divergence and started coming towards the downside. The first H4 candle was an Inside Bar, but the daily candle came out as an engulfing candle. The pair produced two consecutive bearish daily candles. Yesterday’s candle came out as a Spinning Top though. Thus, a downside breakout is needed for the trend continuation. The level of 107.690 seems to be the level of resistance which may end up producing a bearish reversal candle. If that happens, then an H1 breakout at the level of 107.290 would be the signal to go short for the sellers. Let us have a look at the summary of the trade…
- Sell Stop Order: 107.301
- Stop loss: 107.707
- Take Profit: 106.807
In this trade setup, the daily chart seems that it is having a downside correction. However, since the trend reversal has occurred with an engulfing candle and the H4 chart looks very bearish, thus it is alright to look for selling opportunities here for the H4 traders. It is always best if both charts’ trends are the same. Sometimes we may go with the charts like this as well.
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