This pair showed a small consolidation on Friday, after 6 consecutive days of price gains led to an overbought RSI indicator and a shooting star candle indicating a pull back. A hawkish FED and a dovish BoJ led the way to an uneven fight between the bulls and the bears for the last weeks, with the bulls having the upper hand since mid October. Structure always leaves clues, but there is no prior resistance to be found at these heights, for arguments sake I noted Thursday´s high as a resistance level. As prior resistance becomes support, there is a support level at 109.82.
More favorable data coming from the USA versus Japan which is in a recession (and suffers from political uncertainty) and the more hawkish tone from the FED compared to the BoJ are strengthening the dollar in this pair, which leads me to believe the trend momentum will gain again next week, driving the price further up and breaking the resistance level leading to new highs.
I will go long on this pair because I believe in the fundamentals behind the move, although the price might pull back a bit more before going higher.
More favorable data coming from the USA versus Japan which is in a recession (and suffers from political uncertainty) and the more hawkish tone from the FED compared to the BoJ are strengthening the dollar in this pair, which leads me to believe the trend momentum will gain again next week, driving the price further up and breaking the resistance level leading to new highs.
I will go long on this pair because I believe in the fundamentals behind the move, although the price might pull back a bit more before going higher.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan