While I wait for my long GBP/USD trade to play out, I’m looking at this short-term retracement opportunity on USD/JPY. Who’s in?
As you can see, USD/JPY is fast approaching the 109.00 psychological handle that has served as a support back in late January.
Lo and behold, the level also lines up with last week’s highs and a falling trend line retest! Not only that, but it’s also just above a 61.8% Fib retracement on the 1-hour chart.
I’ll have to be careful before I short this one, though. Aside from my GBP/USD trade already putting me on the anti-dollar camp, it’s also possible that USD/JPY can shoot higher than 109.00 before seeing fresh bearish momentum.
If you’ve read Pip Diddy’s latest session recaps, then you’ll know that the Greenback has been bringing sexy back after seeing heavy losses last week.The Fed is also set to share its latest meeting minutes later today, while a bunch of voting FOMC members are scheduled to make speeches throughout the week. And since the Fed was unapologetically hawkish in its last statement, I’m thinking we’ll hear more optimism than pessimism from the FOMC.
This week I’ll be keeping close tabs on USD/JPY’s reaction to the 109.00 handle and look for possible levels to short. Unless we see fresh catalysts that would inspire sustained dollar demand, then we might be looking at a retracement opportunity here.
What do you think? Will the dollar continue to lose pips against the yen? Or are we looking at the early stages of reversal that would push USD/JPY back above 110.00?
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