USD/JPY Price Analysis: Bears lurking at what could be the top of the rally
|- USD/JPY bears moving in for the kill but the structure is key.
- The bears have their eyes on the lower bound support.
USD/JPY is under pressure and falling in a classic reversal topping pattern on the daily chart. The following illustrates the bearish bias from a weaker US dollar perspective. However, there are also prospects of a move higher from here and until the price breaks the lower bound support, the bullish daily structure remains in tact.
USD/JPY daily charts
There are two scenarios. The above illustrates the potential for a move higher from current support while the lower bound support remains intact. The other scenario shows the price running into a 50% mean reversion of the last bearish impulse and prospects of a move towards the lower bound support area:
This thesis would marry up with the weakness in the US dollar, as displayed in the following DXY chart:
DXY H1 chart
The price of the US dollar has been pressured and continues to show signs of weakness given the breaks of structures of late as per the hourly analysis above.
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