Although closing bullish, bearish sentiment persisted with USD/JPY last week, with the weekly candle showing an extremely long wick to the upside; an almost perfect pin bar. This is the fourth week that a wick to the upside has occurred and infers that, although we are getting bullish moves upwards, they are not strong enough to overcome the greater bearish pressure, which is driving prices back down. Price remained below resistance at 104.35 on the daily timeframe, and has set the pair up for a potential return to 103.20.
Although a lower low has not been posted on USD/JPY for several weeks, a higher high hasn’t been posted either. Which means that our overall view on this pair is still bearish. As the last touch of the daily channel structure occurred on the upper boundary, the next logical step would be a touch of the lower boundary at approximately 103.5. If price breaks and closes above resistance at 104.35 and subsequently breaks to the upside from the daily channel structure, a near-term change in trend could then be on the cards, with the resistance zone of 106.00 as the target.
Although a lower low has not been posted on USD/JPY for several weeks, a higher high hasn’t been posted either. Which means that our overall view on this pair is still bearish. As the last touch of the daily channel structure occurred on the upper boundary, the next logical step would be a touch of the lower boundary at approximately 103.5. If price breaks and closes above resistance at 104.35 and subsequently breaks to the upside from the daily channel structure, a near-term change in trend could then be on the cards, with the resistance zone of 106.00 as the target.