USDJPY: Don't Sell...Yet
The Yen continues to underperform all major pairs, including the Dollar. Yen weakness rather than Dollar strength is currently responsible for the gains that the Dollar has made, retracing some 700 pips off of the March lows. and, more recently, 230 pips off the August low. Technically we're looking at a potential alternative cypher pattern, though I make almost no trade decisions off of harmonic patterns.
Currently the USDJPY -0.06% is up against resistance at the 112.00 handle, which is also the 68.1% fib retracement off the July 19th high.
I've been on a short bias since I first posted about the pair after getting a short entry signal using my trading methodology, which you can read here. After briefly penetrating my entry zone, the Dollar rallied but has yet to invalidate the trade setup. I'll be watching the next week or so, monitoring what appears to be increasing Dollar weakness. My prediction is that we'll see a low-conviction rally up towards the supply zone (red rectangle ) with little to no momentum. If risk-off returns and investors begin purchasing the YEN than we'll likely see a USDJPY -0.06% sell-off.
For now I'm holding.
Currently the USDJPY -0.06% is up against resistance at the 112.00 handle, which is also the 68.1% fib retracement off the July 19th high.
I've been on a short bias since I first posted about the pair after getting a short entry signal using my trading methodology, which you can read here. After briefly penetrating my entry zone, the Dollar rallied but has yet to invalidate the trade setup. I'll be watching the next week or so, monitoring what appears to be increasing Dollar weakness. My prediction is that we'll see a low-conviction rally up towards the supply zone (red rectangle ) with little to no momentum. If risk-off returns and investors begin purchasing the YEN than we'll likely see a USDJPY -0.06% sell-off.
For now I'm holding.
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