USDJPY - Newborn Trendline?
Hey hey!
I hope everybody is doing great! Let's walk together trought some potential setups for next week on our favorite pairs, here is USDJPY to start up with.
USDJPY has been on the upside since the dollar has gained some steam lately fueled by US news supporting dollar's strenght. JPY has been especially affected, the reason being that, while the BOJ is still maintaining it's ineterest rates close to zero, the Fed is debating on keeping it's high rates longer than expected looking to keep fighting against inflation.
All for this is making a favorable ground for an ongoing advance of the dollar against the yen for the next weeks/months, until we can see some sort of rebalancing between the rates of the Fed and the BOJ and it's hard to see this hapening before the FED pivot expected later this year.
Let's see now what we have from a TA point of view. After the solid double bottom we've had in the second half of january, we're going up, breaking a level after another. Last week we managed to go from 131.00 all the way to 135.00 without encounering any real resistance. But 135.00 is a strong psychological level, and the price has reacted strongly to it, preparing what could be a retracement, for the begining of next week.
There's a top at 132.50 that looks like it could be retested, it is also the 50% Fib retracement of the previous push up, and, if timed properly, price could come and touch our "wanna be" trendline in green, confirming it.
The situation :
1) Macro economics favor a strong dollar
2) Downtrend in USDJPY has been broken from a technical point of view
3) Price is reacting at the 135.00 level, like it did 4 times in the past already
4) We are identifing an Area of Interest, an area where the price could react to
5) This area has 4 elements in favor of a rebound of the price:
- 132.50 psychological level
- 50% Fib retracement from last push up
- Previous High, that could become support
- It could be the 3rd touch of a newborn trendline
Knowing all this, I'm gonna put on my hunting hat, get my rifle all cleaned up, and wait for my bird to land...
Hopefully it will, if not, another will, in both cases I'll be ready
Cheers everyone and safe trading!!!
I hope everybody is doing great! Let's walk together trought some potential setups for next week on our favorite pairs, here is USDJPY to start up with.
USDJPY has been on the upside since the dollar has gained some steam lately fueled by US news supporting dollar's strenght. JPY has been especially affected, the reason being that, while the BOJ is still maintaining it's ineterest rates close to zero, the Fed is debating on keeping it's high rates longer than expected looking to keep fighting against inflation.
All for this is making a favorable ground for an ongoing advance of the dollar against the yen for the next weeks/months, until we can see some sort of rebalancing between the rates of the Fed and the BOJ and it's hard to see this hapening before the FED pivot expected later this year.
Let's see now what we have from a TA point of view. After the solid double bottom we've had in the second half of january, we're going up, breaking a level after another. Last week we managed to go from 131.00 all the way to 135.00 without encounering any real resistance. But 135.00 is a strong psychological level, and the price has reacted strongly to it, preparing what could be a retracement, for the begining of next week.
There's a top at 132.50 that looks like it could be retested, it is also the 50% Fib retracement of the previous push up, and, if timed properly, price could come and touch our "wanna be" trendline in green, confirming it.
The situation :
1) Macro economics favor a strong dollar
2) Downtrend in USDJPY has been broken from a technical point of view
3) Price is reacting at the 135.00 level, like it did 4 times in the past already
4) We are identifing an Area of Interest, an area where the price could react to
5) This area has 4 elements in favor of a rebound of the price:
- 132.50 psychological level
- 50% Fib retracement from last push up
- Previous High, that could become support
- It could be the 3rd touch of a newborn trendline
Knowing all this, I'm gonna put on my hunting hat, get my rifle all cleaned up, and wait for my bird to land...
Hopefully it will, if not, another will, in both cases I'll be ready
Cheers everyone and safe trading!!!
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