Bounce, bounce, bounce, bounce…USD/JPY has been movin’ and groovin’ inside a range on its 1-hour chart as it found support around 79.30 and resistance near 79.80. After that strong drop last week, the pair found itself at the top of the range once again. The question is: Will resistance still hold this time? Stochastic already made its way out of the overbought zone and is crawling downwards, indicating that dollar bears are in control.
Can GBP/JPY keep climbing? The pair has been cruising inside a rising channel on its 4-hour time frame but appears to be stuck in the middle of the range. Stochastic is already in the overbought region, which means that pound bears could pounce soon. Of course there’s still a chance that the pair could edge higher and find resistance at the 126.00 mark near the top of the channel before heading towards the bottom.
Here’s a potential swing trade idea on CAD/JPY. Loonie bears seem to be very exhausted after that strong downtrend that started in March this year so they have been on a hiatus since mid-May. Because of that, CAD/JPY enjoyed a nice pullback after bouncing from the 75.00 handle. But how long with the retracement last? There’s a former support area around the 80.00 mark, which is close to the 61.8% Fib and could act as potential resistance. Bear in mind that stochastic is almost at the overbought zone, which means that Loonie bears could spring back to action sooner or later!
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.