General Market Outlook: USD/JPY Consolidation > Continuation Up?
For the past few months, USD/JPY has been stuck within a consolidation channel, with the majority of price action at the center. So at this point, it's become pretty obvious there's a pending big move but the question is, which direction is it going to be?
1. From a technical point of view, if price continues to move down, the next bounce off the lower channel lines should be the last because it coincides with the long term upward trend line (black). So assuming the black trend line holds, price should be moving upwards and out of the consolidation channel.
2. Based on BOJ's monetary stance and their goal to raise inflation levels to 2%, I'd suspect the next move will be a continuation upward push.
3. However, considering this is so obvious, will the "big money" go against BOJ knowing that they'll step in? If they do somehow push USD/JPY down, it can go down quite a bit and as far as bulls are concerned, don't be fooled and think the 100 level will hold as solid support. Yes, there will be large buy orders sitting at 100 but I'm fairly positive that it won't hold on the way down due to the lack of confluence around that level. Most of the support is sitting above (100.80) and below (99.50/99.00).
Personally, I'm leaning towards long. What about you?
1. From a technical point of view, if price continues to move down, the next bounce off the lower channel lines should be the last because it coincides with the long term upward trend line (black). So assuming the black trend line holds, price should be moving upwards and out of the consolidation channel.
2. Based on BOJ's monetary stance and their goal to raise inflation levels to 2%, I'd suspect the next move will be a continuation upward push.
3. However, considering this is so obvious, will the "big money" go against BOJ knowing that they'll step in? If they do somehow push USD/JPY down, it can go down quite a bit and as far as bulls are concerned, don't be fooled and think the 100 level will hold as solid support. Yes, there will be large buy orders sitting at 100 but I'm fairly positive that it won't hold on the way down due to the lack of confluence around that level. Most of the support is sitting above (100.80) and below (99.50/99.00).
Personally, I'm leaning towards long. What about you?