Can USD/JPY extend its uptrend over the next couple of trading sessions?
As you can see, the pair is forming a potential morning star on the 4-hour time frame.
And while that’s usually enough to catch the attention of some bulls, its also doing so near the top weekly ATR, a 50% Fibonacci retracement, AND the channel resistance that it had broken earlier this week.
Talk about the stars (heh) lining up!
You know that I’ve been watching this uptrend for a while now. Heck, we even talked about a very nice entry a couple of weeks back.
This time around, I’m counting on the fact that the U.S. will avert another government shutdown to keep the dollar’s bullish run alive.
It also doesn’t hurt that high-level talks between the U.S. and Chinese trade representatives have been “productive,” enough for Mnuchin and Lighthizer to schedule talks with Chinese President Xi Jinping.
— Steven Mnuchin (@stevenmnuchin1) February 15, 2019
Still, I’m not planning on entering any trades until I see a bit of momentum. For one thing, Uncle Sam will print the UoM consumer sentiment reports today. If the numbers are as bad as yesterday’s retail sales data suggested, then we could be looking at another round of dollar weakness.
And then there’s the itty bitty issue of the President declaring a “national emergency” in an attempt to fund a border wall without congressional approval.
Statement on Government Funding Bill: pic.twitter.com/DrNv9D4rEi
— Sarah Sanders (@PressSec) February 14, 2019
Analysts say that the move could spark debates about the reach of executive powers and set a dangerous precedent for future policymakers. If the announcement gets enough legal challenges to lose effectiveness, then we might see the dollar lose pips against its peers.
For now, I’ll wait for USD/JPY to bounce from its current support and clear the top WATR before I consider entering 0.5% of my account. I’m planning on placing my stops just below last week’s highs, and then initially aim for this week’s highs just above 111.00.
What do you think? Can the dollar extend its uptrend against the yen this week? Or should I look at other entry levels?
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