After breaking through resistance around the 121.70 handle, USD/JPY just kept going up. But now, price has stalled and began consolidating into some sort of symmetrical(ish) triangle (or a bullish pennant in the higher time frames). Since the moving averages indicate that the trend is up, our directional bias is therefore for an upside breakout. But since this is a symmetrical(ish) triangle, a downside breakout is just as likely to occur, so wise forex traders will make preparations for both scenarios. If price does break to the downside, forex traders who are bearish on this pair would probably gun for the 121.70 handle.
This is just a plain vanilla ice cream, uh, I mean ascending channel. The basic way to play this setup is to look for support near the bottom of the channel, and lucky us since price is already near the bottom of the channel. Since this is an ascending channel and we’re looking for support to form, our directional bias is therefore obviously to the upside. For confirmation, the 100 SMA and 200 SMA are indicating a steady uptrend while stochastic is currently in oversold territory, indicating that sellers may potentially be exhausted.
No area pattern for this chart, but we do have a Fibonacci setup. For today’s play, price is currently at the price area of significant market interest around the 1.5320 handle. Also, this price level lines up quite nicely with the 38.2% Fibonacci retracement level, giving us another technical argument for support to form here. Furthermore, the 100 SMA and 200 SMA just crossed-over into uptrend mode and stochastic indicates that sellers may potentially be exhausted already since it’s currently in oversold territory. Given all that, forex traders who are bullish on this pair may start nibbling soon.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.
Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.