At The Moment There Are Three Possible Scenarios For The USD/JPY Development In The Short Term

Today is Monday, a day when usually there are no major movements and the market is undecided in picking a direction. Despite that the USD/JPY picture is developing and getting clearer (at least in the short term).

I will begin my assessment from the smaller H1 time frame – as we can see, the pair is at the lower end of the range, which began on 17th May 2017 and continued until today. If we examine the range we could conclude with equal certainty that a breakout is possible in either direction – it could either possibly reach the limit of the wedge>>>, or it could break out to the upside.

On the H4 time frame the picture is clearer. The pair has reached the middle line of the Bollinger Bands indicator, and the price has already formed a range channel. Judging from years of experience observing this indicator, I can suppose that the pair will reach the lower band of that channel and the local low at 110.232 on 18th May 2017.

On the daily time frame the pair is definitely bearish and the target is around 110.40 – 110.00. It would test the low at the very least.

We should also watch what pattern the pair will form at the support at 110.20 – 110.00.

One of the scenarios is a move to the upside and a development within a range channel between 110.00 and 112.00. The second scenario allows for a continuation of the movement to 109.00 and in the third scenario there will be a renewal of the rally.