USD/JPY Set for Major Moves? Key Levels & Trends to Watch in This Week’s Forecast

USD/JPY Analysis: Buy Opportunity at Weekly Support with Strategic Profit-Taking

The USD/JPY pair has recently approached a key support level on the weekly timeframe at 142.248, signaling a strong buying opportunity. Based on the technical analysis, entering a long position at 144.186 is recommended, with a target take-profit at 146.802 and a stop-loss at 142.030. Let's explore the technical reasons for this strategy and how traders can maximize their gains.

Weekly Timeframe: Support at 142.248

The weekly chart shows that USD/JPY is currently respecting the 142.248 support level. Historically, this area has acted as a crucial point where buyers come into the market, pushing the price higher. Recent price action shows the market rejecting lower levels around this support, indicating that the pair is gathering bullish momentum.

While the current support is at 142.248, the ideal entry point for this trade is at 144.186, where the price will likely resume its upward trajectory after testing resistance in shorter timeframes. By entering at this level, traders can position themselves to ride the bullish trend while managing risk.

4-Hour Timeframe: Resistance Hit, Favorable Entry Point

On the 4-hour timeframe, USD/JPY has recently tested resistance and is showing signs of a potential reversal, aligning with the recommended entry at 144.186. This resistance is acting as a short-term barrier that could lead to a brief pullback before the price continues its uptrend.

By entering at 144.186, traders can capture the next bullish leg as the pair consolidates between support and resistance. This price level provides a favorable risk-to-reward ratio, as the stop-loss at 142.030 offers sufficient protection while the target of 146.802 presents a reasonable upside.

Trade Setup

Entry Price: 144.186

Take Profit (TP): 146.802

Stop-Loss (SL): 142.030

Profit-Taking and Risk Management

The take-profit level at 146.802 is aligned with a major resistance area, where sellers may step in and slow the upward momentum. This level is chosen based on historical price action and market behavior, making it a logical point to exit the trade for full or partial profits.

Partial Profit-Taking Strategy

As the price approaches 146.802, traders can consider booking partial profits. By locking in gains at this level, traders reduce their exposure to potential reversals. Additionally, moving the stop-loss to breakeven ensures that the remaining position is risk-free, allowing traders to potentially capture more profits if the price continues higher.

Why This Setup Works

Strong Support: The weekly support at 142.248 provides a solid base for the price to move higher. Repeated tests of this level indicate that the market is unlikely to break lower, providing confidence in the trade.

Resistance Tested: On the 4-hour chart, USD/JPY has hit resistance and is pulling back toward a favorable entry level at 144.186.

Favorable Risk/Reward: With the stop-loss at 142.030 and the take-profit at 146.802, this trade offers an attractive risk/reward ratio.

Conclusion

The USD/JPY pair offers a clear opportunity for traders to enter long at 144.186 with a stop-loss at 142.030 and a take-profit at 146.802. By taking advantage of the support at 142.248 on the weekly chart and resistance confirmation on the 4-hour chart, this setup maximizes potential gains while managing risk. Traders should also consider partial profit-taking as the price nears the target and adjust the stop-loss to breakeven to secure risk-free exposure for further gains.

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