USD/JPY may experience a correction

USD/JPY may experience a correction

Trade idea

SELL 109.30; TP 109.00; SL 109.45

USD/JPY had a bullish week. Yet, we should notice that the pair has reached some heavy resistance: 100-week MA (109.66) and 200-week MA (109.84). On the D1, we can already see that the movement to the upside has stalled on Thursday as USD/JPY formed a very small inside bar candlestick that looks like a “hanging man” pattern. As a result, a return below 109.35 (61.8% Fibo of the April-August decline) will lead the price down to the 109.00/108.90 area (200-day MA).  

Although we preferred to focus on a bearish scenario in this article, unexpectedly positive news about the US-China, if such materializes, may push the exchange rate to the weekly moving averages and psychological resistance at 110.00.  

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Similar

AUD/CHF suffered losses

The attempt of AUD/CHF to overcome 0.6800 so far hasn’t been successful. The pair formed a “spinning top” candlestick on the D1 on Tuesday.

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