USD/JPY – The Hawkish Remarks of Powell Pushes the Pair Up Giving a Lift to USD
- Risk – 0.75% per trade
- Trades should be placed prior to Thursday, precisely 5 pm Tokyo Time
Short Position
- Open these positions after a bearish price action reversal on hourly time frame, once price touches ¥138.39 or ¥139.00.
- Stop loss – place at 1 pip below the local swing low and move to break even once the trade gets 20 pips profit.
- Take profit – Remove 50% of trade as profit once the stop loss is adjusted.
- Let the remainder of the trade position run after taking profit.
Long Position
- Open these positions after a bullish price action reversal on hourly time frame, once price touches ¥137.39, ¥137.06, or ¥136.53.
- Stop loss – place at 1 pip above the local swing high and move to break even once the trade gets 20 pips profit.
- Take profit – Remove 50% of trade as profit once the stop loss is adjusted.
- Let the remainder of the trade position run after taking profit.
Chart analysis reveals that the USD/JPY pair is now more bullish than earlier as an after effect to the Fed Chair’s remarks. According to Powell, the Federal Reserve will increase interest rates sharply and more swiftly than previously anticipated. As a result, the US Dollar index rose above 105 and the US Dollar gained strength. The Japanese Yen did lose momentum as a result of the strong USD, but it is still performing better than other currencies like the GBP and AUD.
It appears that the rate increases that allude to the likelihood of a looming recession are supporting the Japanese Yen to some extent. Thus, there is a general risk-off sentiment in the market. Going long would be the safest option to consider for now, although the uptrend could end up being not that strong. Based on the current circumstances, a bullish reversal may be the most likely result, which puts the pair’s overall outlook bullish.
