Nice Dollar strength across most pairs yesterday but I believe it will be short-lived. I believe that the patterns in major pairs and in the Dollar index imply more downside and more Dollar weakness.
Price remains inside the bearish channel and below the 4 hour Ichimoku cloud. The last low made was a confirmed one according to the RSI reading and this implies that more downside should be expected. There is no bullish divergence yet to imply a full scale reversal. The bounce has reached the channel resistance levels and price is giving bearish divergence RSI readings in the 1 hour chart. At least a pull back is imminent.
I’m pretty confident of this wave pattern as I believe the upside for the EURUSD is unfinished. Price remains above the 4 hour Ichimoku cloud and I believe even if we reach that area, a strong bounce will follow. 1.0750 is my target area.
I was bearish from 118 and closed 60% of my position at 113 and let the rest run with a stop at 114.25.
#USDJPY closed 60% of my short position at 113
— Alexandros Yfantis (@alexanderYf) January 17, 2017
Now price has reached important resistance levels while price continues to trade below the Ichimoku cloud.
I believe we will see below 114 until Friday.
Both pairs have respected their bullish short-term channels and so should we. A new high is expected in both pairs.
Thank you for taking the time to read my latest post.