USD/JPY swing trade long idea
Updated
It is a quiet start to a busy week, but USD/JPY is trying to rise above a key support level. The 1990 high and MOF intervention level from May reside around 161.16/21, the daily RSI (2) has reached its most oversold level since the June low, so perhaps a swing low could be due on the daily chart.
The market has been rising for the past couple of hours, although RSI (2) on this timeframe is close to overbought level. We suspect the market will have another crack at the level before rising. Therefore, the bias is for a false break of the 161.16/21 area before its next leg higher.
Keep in mind that two key risk events include Jerome Powell's testimony and US CPI data. If Powell strikes a dovish tone and it is coupled with weak inflation data, a break below 160 seems feasible later this week. For now, an initial bounce is favoured.
The market has been rising for the past couple of hours, although RSI (2) on this timeframe is close to overbought level. We suspect the market will have another crack at the level before rising. Therefore, the bias is for a false break of the 161.16/21 area before its next leg higher.
Keep in mind that two key risk events include Jerome Powell's testimony and US CPI data. If Powell strikes a dovish tone and it is coupled with weak inflation data, a break below 160 seems feasible later this week. For now, an initial bounce is favoured.
Trade closed: target reached
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