What happened at the end of last week trading session
USD/JPY: The US dollar continued its downtrend with lower highs and lower lows towards the end of last week's session and attempted on many occasions to break out of the falling wedge price pattern to the upside but was unsuccessful and ended the last session of the week with a lower high at 110.888.
What is going on now
USD/JPY: The US dollar started the trading session with another lower low at 110.430 and shot up and try to test the previous close at 110.774 but ran out of gas and retreated to 110.488 support creating another higher low which is a strong Bearish trend.
My thoughts on what may happen
1. USD/JPY: The current data for the pair has now created a falling wedge price pattern, and we may continue to see prices contract within the price pattern until it breaks out. The US dollar is currently trading at 110.393 in a very Bearish manner both in short and medium trend. The Pair would need to maintain activities above 110.488 to stay in the wedge price pattern.
2. I suspect that short sellers are still in play, so its best to stay away from any long position and keep monitoring until you get any signals to consider a long trade position.
3. Current support - 110.488, 110.300
4. Resistance - 110. 564, 110.680, 110.774, 110.899
5. It is a good practice to apply a stop loss to all your trades to protect your capital in case the market moves against your position.
The four hours price chart highlights the direction of the trend and the support and resistance price level
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