Following hidden divergence on higher time frames, USDJPY fell sharply past few sessions, looking ahead, momentum on this market is negative which adds into the view so its likely to be testing the prior lows around 110.80 zone.
The USDJPY has been trading in a large triangle on the longer cycle after a bullish Elliot wave impulsive structure that ended in May 2015. Once the price breaks out of the triangle trendline and crosses the wave (D) high, we can expect a long-term bullish move.
However, in the shorter cycle, the price has just completed a three-wave correction that...
1. The era of overactive BOJ intervention is over.
2. Capital managers buy JGBs on an unhedged basis.
3. CHF is also no longer an EU-specific safe haven strategy.
4. Concerns about a US-Japanese trade war increase.
5. Widen trading band for 10-year yields or shorten the duration of assets purchased.
6. Kuroda starting to engineer the 10-year yield higher.
THE LAST BULLISH MOVES WAS FROM THE '' CHASE TO SL '' FROM THE BIGGEST BANKS/ INSTITUTIONS THEN NOW WE CLEARLY HAVE THE CORRECTION NEEDED TO SHORT TO THE NEXT SUPPORT WITH THE LAST CANDEL CLOSED UNDER THE RESISTENCE LINE AND THE DOWNTREND LINE
Just when we are ready to follow the trend and continue to buy, a strong supply came in and near the 4-month supply zone.
The price has broken below a 1-month rising trendline as well as the bottom of a range, and it is even clearer if we look at the strong bearish candle in the Day chart.
The structure has changed into a bearish market and the price has also...