If we take a look at the H4 time frame we will notice that the USD/JPY drop has developed perfectly.
From 114.494 (11th July 2017) to 110.619 (24th July 2017) the pair has moved to the downside in a perfectly formed trend channel (in red). It broke out above the channel, rallied for about 80 pips and then it began dropping again, this time forming a wedge (in blue).
The pair broke out above the wedge again around the 110.37 level. Also, notice that the drop and the development of the wedge happened as a test of the already broken out above red resistance trend line of the channel.
On the monthly time frame, as it could have been expected, the pair could not break out below the strong support, marked by the middle line of the Bollinger Bands indicator, around which the correction was developing for the past 8 months.
In my opinion the correction will soon end and we will see the long awaited rally, which should lead the pair to 120.00 – 122.00.
Let's see what effect the fundamentals will have on it.
ReplyDeleteI fully agree with your analysis!
ReplyDeleteLet’s see how it keeps going.
ReplyDeleteRisk remains on the downside.
ReplyDeleteWell spotted! I'll keep it in mind.
ReplyDeleteGood take on markets, really insightful.
ReplyDeleteGood post!
ReplyDeleteGood insight.
ReplyDelete