Selling USDJPY as bearish pattern nears completion

The USDJPY pair appears to be forming "head and shoulders". For the pattern to fully develop, the price must touch the 145.845 level. This is basically going to be the bottom of the figure. A key requirement is a rebound after reaching this threshold. However, if the pair breaks below 145.200 immediately, the sell signal will be invalidated as the pattern will remain incomplete. The optimal sell entry would be after a rebound to around 147.000. This setup offers a favorable risk-reward ratio, with Take Profit at 145.195 and Stop Loss at 148.750. Therefore, the ratio would be 1:1.

Fundamentally, the US dollar is weakening against multiple currencies due to expectations of a Fed rate cut in September, which puts more downward pressure on USDJPY.

Our final recommendation is to sell USDJPY at 147.000, provided that the pair will bounce off 145.845.

Profits should be taken at the level of 145.195. Stop Loss could be set at 148.750.

The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance doesn’t allow opening a position of this size, it’s better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.