In the last few weeks, the greenback gained strength and climbed confidently on the chart against the counter japan currency. Two weeks ago the pair with very strong momentum broke the M_R1 and M_R2 levels and last week the price was moving above these levels with very strong expectations for the bullish run to continue. According to these expectations and the bullish momentum, we were positioned long on the market but on the last two trading days, on Thursday and Friday the pair reversed with a very quick move on Trump's comments about FED and rate hike so the pair reversed and wiped out it's gains on the previous weeks. On the last hours of last week's trading, the pair broke the support at M_R1 and at the close was trading below it. For this week we will wait to see how the price reacts to the M_R1 area, and only after a retest we will be looking to get a trading position. A possible scenario may be the pair opening above the M_R1 and then testing this level to gain strength for an upmove, at least to the M_R2.
Comment:
Contrary to our expectations, the pair opened on Sunday below the M_R1, then we had a test of the M_R1 area at 111.499 from below, but the area served as good support. We think that as the price is trading now below this area, the bulls may try again to test and break the M_R1, so in the next test it can be possible to get into a short position, using proper lot sizing and risk management.
Comment:
USDJPY bears were stronger this week, dragging the price lower after testing the resistance at M_R1 at 111.499. For the next week during our analysis we will create our trading plan around a possible re-test of the resistance at M_R1 and possibly short positioning.