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We’ve been discussing USDJPY
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for several weeks now. First when the pair was nearing the final days inside the terminal wedge as well as August 19th when the pair broke free from 8 months of consolidation.
Upon breaking out of this consolidation we were originally looking for a pullback and retest of the 103.10 to 103.30 area in order to get a more favorable entry.
However as time passes and this market continues to hold its ground the likelihood of such a pullback is growing smaller.
As we’ve come to expect from USDJPY, the pair has started to form a bullish wedge on the 4 hour chart. We can therefore use this pattern to our advantage in our search for a long entry.
Summary: Wait for a break and close above the wedge on the 4 hour chart. Buy on a retest of former resistance. Because this rally is so strong, I will be trading this blindly. In other words I’m not requiring bullish price action. A retest of former wedge resistance will be enough to trigger a long entry for me. Key resistance comes in at the year open around 105.30.
Note: If the bottom of this wedge breaks first, even better. That simply means that we’ll get a better entry – possibly between 103.10 and 103.30.
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