USDJPY: Bearish Cypher In Play But Beware!

We just closed our LONG trade in this pair yesterday banking a nice +327 pips profit! Did you do as well?

But now we are dealing with prices sitting at the minor trend line and also a POTENTIAL Bearish Cypher that is near to being filled. But what we also see is that this cypher would have to complete OVER that minor trend line! That would mean that prices for this pair would need to break the TL in order to fill that cypher. What does that mean if prices were to do that? Well, first off, remember that trend lines are somewhat subjective in how different traders apply them. So they are not definitive in how and where they are located on the chart. Secondly, this is a minor TL in that it does not define the larger overall trend. So we really should not place too much value on prices breaking that TL. But it is still there nonetheless.

If it breaks that TL and then closes back under it, then that makes that TL less of a factor going forward and the next time it is tested, prices should decisively break through it. Which is what I am seeing should happen in the near future. But for now......not so fast!

I project that prices should break the minor TL and complete that cypher and may in fact move slightly higher than that before coming back down and closing back under that minor TL. But that possible pullback should only be for the short term! Take a look at this Daily chart and you'll see my prediction for what is to happen in this pair for the longer mid-term. I believe it should reach up to the MAJOR DT TL (blue line) before we see it fall again: