After today, everything should be clear on the USDJPY
|Last week was rich in terms of the macro data. That helped to create few mid-term trading signals on many instruments. The one without a clear signal yet is the USDJPY but this should change today as the price is currently in a very important place and the close of the daily candle should show us the path for the next few days, or even weeks.
Let's us start from the very beginning. USDJPY since the end of the last year was in the down trend. The bearish sentiment ended officially in the middle of the October, when the price broke the blue line connecting crucial lower highs. Although the negative sentiment ended, there was no clear buy signal yet. We were still below the 114,4 – crucial resistance in the second half of the year (red). The price already stopped there three times, in May, July and October. The last bounce, few days ago was very limited, which showed us that the supply is slowly abandoning this place, which increased the chances for a bullish breakout. Today, buyers made another attempt to break this level but so far it is not successful. The day has just started so we cannot use the daily candlestick but that should be clear soon. Shooting star with a long head at the end of the day will be a sell signal (false intra-day breakout). On the other hand, the price closing on Monday above the red area will be a mid-term buy signal on the USDJPY.
The potential target for the buy option are highs from December and January around the 118.6. The potential target for the sell option are the 2017 lows located around the 108 (green). In my opinion, buyers have bigger chances for a success and in the next few weeks, we should be able to see a strong bullish wave on this instrument.
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