USDJPY: Long for now with the potential of a short trade!
I predict that USDJPY will continue to rise until reaching the upper trend line. Thereafter, I think there will be a reversal in direction at which point the price could once again bounce off of the other trend line. The two trend lines were both tested multiple times since 12th August which gives them a much higher significance in the market's direction. Moreover, the price just recently tested the 0.382 Fibonacci retracement level which suggests to us even more its bullish nature
The Relative Strength Index from 12:30 (17th August) does not indicate any kind of convergence, so the price's momentum does not seem to be weakening. Thus, this further suggests that the price will continue to rise until reaching the trend line.
In case my prediction of going long turns out to be incorrect, setting up a stop loss at 124.335 would be most suitable as then the price would have broken the 0.382 Fibonacci retracement level.
Stop loss: 124.335
Take profit: 124.545
Risk/Reward Ratio: 2.09
The Relative Strength Index from 12:30 (17th August) does not indicate any kind of convergence, so the price's momentum does not seem to be weakening. Thus, this further suggests that the price will continue to rise until reaching the trend line.
In case my prediction of going long turns out to be incorrect, setting up a stop loss at 124.335 would be most suitable as then the price would have broken the 0.382 Fibonacci retracement level.
Stop loss: 124.335
Take profit: 124.545
Risk/Reward Ratio: 2.09
