USD JPY Technical Analysis - USD JPY Trading: 2014-12-26

Outrunning signal

Let’s consider the H4 chart of USD/JPY instrument. In spite of long-term bullish mood (D1,W1,…) we observe a downwards correction. Price crossed an upward H4 trend line and entered a narrow range of 119.829-120.927. In case of a flat motion signals of leading oscillators are extremely important. That’s why we recommend paying attention at RSI-Bars patterns. We observe that an upward tendency slowly turns to the red zone – look at the trends fan. Then a formation of a new bullish trend was fixed (marked by the red corridor) and a simultaneous breakdown of the support level occurred. In such a way the oscillator sent an outrunning signal to the most prudent investors – a direction choice became obvious. The 119.829 support may be used for the pending sell order placement. Risk mitigation may be tied to the fractal resistance of 120.927. This key level was confirmed by the historical values of ParabolicSAR, the upper boundary of Donchian Channel and the intersection of a previous H4 trend line. We suppose that the given scheme of risk control should be comfortable for conservative traders.

After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position	Sell
Sell stop	below 119.829
Stop loss	above 120.927

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