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USDJPY Upward Momentum Stalls – Getting Ready to Catch a

The USDJPY has rallied aggressively higher after breaking out of the long term consolidation pattern we witnessed for the first half of the year. It’s no surprise the breakout out of such a long term churning pattern has been so explosive. The bullish momentum has now pushed price to an extended point relative to its mean value and starting to look a little ‘top heavy’.

 

usdjpy inside day mean reversion

 

We know the market won’t move in one direction forever and know that a correction is due for this market. An Inside day formed last session as price stalled and churned at these extended prices. The Inside day closed fairly lower from the open price. A  negative  close to it’s body gives the setup more of a bearish feel. If price breaks below the low,  we could see a counter trend mean reversion kick off.

Traders looking to get in with the bullish trend momentum should wait for a bullish setup to form closer to the mean value to avoid being wiped out in any correctional movements.

Market Commentary by: The Forex Guy

Dale Woods

Dale Woods

The Forex Guy is an educational Forex trading blog run by Dale Woods who has been a passionate retail Forex trader for over 6 years. Dale trades the Forex market exclusively with price action based methodologies, believing price action trading to be one of the powerful approaches used the market today, and really is the core foundation of any good trading system. Dale also strongly believes in keeping charts clean and keeping things simple, logical and uncomplicated. By making trading decisions straight off the raw price action data, you can ‘bypass’ unnecessary variables like exotic indicators, trading robots or magical pivot levels. Dale enforces the idea that there is hardly any edge trading news and economic data releases and much prefers to make trading decisions straight from the candlestick themselves. ‘The Forex Guy’ is dedicated to providing knowledge to serious and passionate traders who want to learn the art of price action trading, positive geared money management and how to psychologically condition themselves to become a professional trader.