USDJPY produced an H4 bearish engulfing candle at a key level of resistance but the Bullish Structure remains intact. Moreover, today’s first and second H4 candle seems to be very bearish having rejection from the same level of resistance but at the same time, it’s bouncing off the 20 Period SMA line. We are looking at a possible Upward Bullish Breakout if the price of USDJPY can break through resistance levels.
This trade idea was generated by our powerful Elite Swing Trader System.
The level of 108.015 has been working as intraday resistance. The level has already produced two bearish candles. The level of 107.800 is the lowest low of Friday’s candle. The level is to be breached by an H4 candle first and the very next candle is to be closed within the breakout candle. If these two conditions are met, an H1 bearish engulfing candle right at the level of 107.800 would be the signal to go short on the pair. Let us have a look at the summary of the trade…
- Buy Stop order: 108.012
- Stop Loss: 107.731
- Take Profit: 108.417
Taking an entry on a pullback is the safest way to trade. Pullback offers better risk and reward ratio and winning percentage. It attracts more traders. Thus, it gets more liquidity, so Take Profit level gets hit quickly as well. However, we need to be immaculate on pullback reversal as well as Take Profit level. Pullback reversal level is where the price makes the breakout, but Take Profit level varies. It needs a lot of practice. To start with, count a significant level of swing high or swing low to set your Take Profit level.
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