Last time we posted an analysis on USDJPY we noted how much higher it can travel and that the area of 100 was too dificult to be broken with the first try. Bulls were warned to be cautious as a pull back was something normal to be expected. Our upward sloping channel gave us a target between 99.50 and 100 for a top. And that is what happened. Prices got rejected once they touched the upper boundaries of the channel.
Our first condition for a top has been met. However we should now expect a pull back down towards the lower boundaries of the upward sloping channel at 95-96 level. As long as it stays within this channel, the longer term trend will remain upwards. If broken, will take control. As always our favorite strategy is to bet in favor of the support and resistance levels. That is why we believe it is more prudent to close long positions at least since prices reached the resistance level our technical analysis showed us.
Taking a closer look at the 1 hour chart, we point several support and resistance levels that if broken could provide good fast profits for short-term trades. Increase weakness and continuation of the short-term downtrend will be confirmed if 97.50 is broken. Above 98.70 short term trend could again change to up, giving another chance to retest the highs. Above 100, prices will be making new highs and we expect to see 102-103 levels as they are the next targets.
For more help trading this pair, don’t hesitate to contact us. As always, thank you for taking the time to catch up on my thinking.
A term used to describe a trader (bear) who is expects that a particular asset – be it a commodity, currency or product – to fall in value. The opposite of a ‘bull’.
The idea is that bears attack by getting up on their hind legs and striking their opponents down with their paws, symbolising the fact that they are sellers driving prices down.
Beliefs held by the aforementioned ‘bears’ of the trading world, are described as bearish. Characterised by a generally pessimistic outlook on the state of a given asset, a bearish outlook would suggest that a fall in value is imminent. Opposite of bullish.
A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.
The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.
Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.