USD/JPY Breakout Season!
Updated
Didn't get to post an analysis last week as I was gone on vacation and wasn't very active in the markets. The analysis from two weeks ago called for a period of consolidation for USD after a long downtrend. The consolidation occurred between two major zones. Now that orders are present in the market the trend still looks to be down based on the higher timeframes (daily,weekly).
This week I could see a breakout occurring either up or down (most likely). I have plotted my zones based off daily/ 4hr charts based on price action. Safe haven assets are on the rise as well as equities have dropped fairly recently, this has caused bullish momentum in Gold and the Yen. That being said I expect the negative correlations of USD/JPY drop for a rise in Gold; 1300 seems a fair target to the upside if all goes bad for USD expect price to break this level after it was tested earlier last week. Also a stronger yen will cause GBP/JPY to continue its trend after a brief consolidation period on the way down. However we could see price rise for liquidity before these moves take place.
Fundamentally the USD has been weaker due to the recent FOMC reports and Fed decisions also geopolitical issues as well as civil issues.This week on Friday we will have the NFP report, last months NFP was positive and USD went up nicely and showed a bit of life in what was the continuation of a downtrend. This weeks NFP could be positive or negative based on the data. USD could melt possibly as everything seems stacked against it right now but we still have a weeks worth of price action to play out so it all depends on order flow.
We will get a really good idea of where price is heading once this week is over as we should have a breakout direction with the added volatility of NFP week fundamentals.
This week I could see a breakout occurring either up or down (most likely). I have plotted my zones based off daily/ 4hr charts based on price action. Safe haven assets are on the rise as well as equities have dropped fairly recently, this has caused bullish momentum in Gold and the Yen. That being said I expect the negative correlations of USD/JPY drop for a rise in Gold; 1300 seems a fair target to the upside if all goes bad for USD expect price to break this level after it was tested earlier last week. Also a stronger yen will cause GBP/JPY to continue its trend after a brief consolidation period on the way down. However we could see price rise for liquidity before these moves take place.
Fundamentally the USD has been weaker due to the recent FOMC reports and Fed decisions also geopolitical issues as well as civil issues.This week on Friday we will have the NFP report, last months NFP was positive and USD went up nicely and showed a bit of life in what was the continuation of a downtrend. This weeks NFP could be positive or negative based on the data. USD could melt possibly as everything seems stacked against it right now but we still have a weeks worth of price action to play out so it all depends on order flow.
We will get a really good idea of where price is heading once this week is over as we should have a breakout direction with the added volatility of NFP week fundamentals.
Note
Breakout to the downside. Trend continuation.Note
Crazy day for UJ yesterday. Price broke lower but then bounced strongly off a major support blasting through the consolidation range, retest and then making a higher high. Will be interesting to see what NFP brings.
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