USD/JPY, catch me if you can!
USD/JPY opened the week with -50 pips gap at 122.33 and that was the low of the day at my platform, from where the pair start to rise, broke strong resistance at 122.80/123.00 easy and it didn’t stop until 123.49, the high of the day for now, where the pair has found a resistance in the last 6 hours. Support on the way down is 123.30, so the pair is moving in the 20 pips range. Break bellow this level could lead the pair down to 123.00, on the way up, next resistance is placed at 123.75, the previous resistance fron July 02., stronger at 124.00 > 124.30/50. The pair is exremely bullish for three days in a row!
There is a falling trend line and the price action has broken above which is quite a bullish move. Looking at Ichimoku Kinko Hyo, the price action is trading above kumo which is bullish. Future kumo is becoming thicker which could indicate that it could offer support. However tenkan sen is above kijun sen which is very bearish. Both of them are relatively flat with no trajectory. Chinkou span is below the price action though there is no clearance suggestive of being a no signal. Thus with the very mixed messages, there is really no signal of a trend being established. However the price action does remain above the 200 SMA which is bullish. Thus in summary I think it is still very much a ranging market and possibly one not to trade unless holding a position long already. My hunch is that it will go long though trading a hunch is never the best trading plan. Fundamentally I think we will start seeing some Dollar strength particularly as the Autumn arrives since the FED will have to start putting up interest rates. However there policy of late has very much been wait and see using every reason not to put up interest rates. However inflation does remain anchored in the US and while it continues to be the case, possibly they should not be putting up interest rates. Thus while this dilemma remains, maybe USD/JPY will continue to range.
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