USDJPY (April 30th to May 5th 2017)
Looking at the previous weeks analysis, we can see that it followed path A amazingly. When we reached the channel resistance at 112.800 we can see that it has been rejected and bounced back down to 112.000.
Below I will share the analysis for the coming week and what to expect (very interesting zone we are in).
Monthly: Bullish Pin Bar close –> Bullish continuation (nice wick fill before the pin bar)
Weekly: Strong bullish candle
Daily: Strong bullish week. Rejection off resistance and weekly channel resistance (112.800 strong Resistance)
H4: Possible ranging range between 112.900 – 112.100 (Possible Double Top Forming)
Overall USDJPY Analysis
- We have reached the weekly channel resistance. Look left, and you will see that when we touched the weekly channel support we formed a double bottom and continued higher. There is a possibility that the double top will form and we will continue lower.
- I mentioned 2 weeks ago that we needed to create a lower high on the higher timeframes. We have done exactly that following the weekly channel. So, whatâ€™s next? LOWER LOW!
- However, it is entirely possible for us to break that resistance and continue higher. Why?
- NFP and Unemployment rates were positive, the June hike possibility is at 93%. As we witnessed what happened lasts time, prior to the hike the USD strengthened, and when the hike was announced, the USD tumbled down the bowling alley.
- So, it is entirely possible that if we break the resistance, we may find ourselves in the same situation, which means we may go to 113.500 at least and to the 115-116 range.
- BUT, if we break this neckline we will continue the overall bear trend that we are in, meaning we are likely to see 106.
- Path A B C shown above.
- Most likely the path A as I believe we have created that lower high we needed to continue lower, and the 113.000 psychological + technical level is strong + weekly channel resistance
- ALWAYS KEEP AN OPEN MIND