While the past week has given traders a handful of possible drivers of price action, one of the most pertinent moves in the Forex markets has been the return of robust weakness in the yen. The recent influx of this weakness can be due to many factors but some of the more prominent factors include BoJ's dovish monetary stance, continued QE to try and bring inflation rate down to the "accepted" level, strengthening US dollar, and returned risk due to last weeks FOMC, NFP, and the most prominent of economic events; the french election. First off, a contrarian point of view would be to go short here since the retail data shows that traders are net long and longer term i may just agree with that. Right now, there is buzz in the air for a bullish USD which will continue for a while with reports of a 100% rate hike in June. But based on TA, this might be a short longer term. We have seen a 2008 major downtrend that ended in 2012 when a new major uptrend started and has recently ended in the middle of 2015. A major top at the 125 price level will continue to serve as major resistance. After the prolonged uptrend finished, we can see that 2016 was a major correction year for the whole year. Past price action has created a price action which was where the correction bounced to and than fell finding support at the .618 fib retracement level which seems to be a bull flag that was recently broken through showing bull strength in UJ shorter term because of strengthening USD. I don't imagine that price will get to point D but if it does, it sets up a nice geometric trade to follow. I would say stop should be the 0 fib line and possible targets would be the blue boxes. My outlook is leaning bearish in the coming weeks as its only a buzz thats keeping the dollar alive and there is alot more to worry about that will cause the dollar to suffer. From a price action standpoint, i see a small overshoot of the sliding resistance that goes through point B, tests resistance at point B and falls due to a double top pattern completion. Targets would be the C point in the cypher pattern and that the middle of the choppiness area near point A.
Trade with Care and feel free to give constructive criticism!!
Thank you for the support!!
Trade with Care and feel free to give constructive criticism!!
Thank you for the support!!