Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

USD/JPY - Profitable Opportunity Just Ahead of the Bulls?

Currencies / Japanese Yen Sep 11, 2018 - 03:47 PM GMT

By: Nadia_Simmons

Currencies

Despite the Thursday’s closure below the lower border of the consolidation and the Friday's drop to the lowest level for more than two weeks, the bulls kept cool and reborn in recent days, erasing almost entire recent move to the downside. Will the pro-growth formation that is drawing on the horizon encourage them to fight for higher values of USD/JPY in the coming days?


EUR/USD – Similarity to July

Although EUR/USD moved a bit higher earlier today, the upper border of the red declining trend channel stopped the buyers once again, triggering another pullback.

When we take a closer look at the daily chart, we clearly see that similar situation we observed at the end of July, which increases the probability that the next bigger move will be to the downside and lower values of the exchange rate are just around the corner.

Taking all the above into account, we believe that one more test of the blue dashed horizontal line is more likely than not (as a reminder, this is a potential neck line of the head and shoulders top formation).

What could happen if we see a breakdown under this support?

In our opinion, EUR/USD will extend its decline not only to our initial downside target but will also test the recent lows (in terms of daily closures) or even the lower line of the red declining trend channel in the following days.

USD/JPY - Chance for Bulls

On Friday, the exchange rate invalidated the Thursday’s breakdown under the lower border of the blue consolidation, which encouraged currency bulls to act.

Earlier today, USD/JPY extended gains, which suggests that we’ll see a realization of yesterday’s scenario (an increase to at least the upper border of the above-mentioned formation) in the very near future. Nevertheless, before we see such price action, the buyers will have to break above the red declining resistance line based on August peaks.

How important could this line be for the future of the bulls?

As you see on the above chart, it could be the neck line of a potential reverse head and shoulders formation. Therefore, if currency bulls manage to break above it, we could see an upward move not only above the yellow resistance zone (created by the 61.8% Fibonacci retracement and the highs that we saw at the turn of July and August), but also a test of the July peaks or even a rally to around 114, where the size of the increases will correspond to the height of the above-mentioned formation.

What’s interesting, in this area is also the lower border of the orange resistance zone (seen on the weekly chart below), which stopped the buyers several times in the past.

Therefore, if we see a confirmed breakout above the red resistance line and the upper line of the blue consolidation, we’ll likely open long positions (of course, if there are no other technical contraindications to this). We will keep our subscribers informed should anything change, or should we see a confirmation/invalidation of the above.

USD/CHF Meets Its First Resistance

On Friday, we wrote that taking into account, the (…) support area, it seems to us that (…), the space for declines is limited and we’ll see a reversal and rebound at the beginning of the upcoming week.

(…) If the situation develops in line with this assumption, USD/CHF will (…) re-test the strength of the lower border of the red declining trend channel in the very near future.

Yesterday, currency bulls implemented the above scenario and the exchange rate increased to the lower line of the red declining trend channel. Earlier today, we saw one more attempt to move higher, but despite this upswing, the sellers managed to stop their opponents and triggered a pullback, which invalidated a tiny breakout above this resistance.

Such price action suggests that currency bears are quite active in this area and as long as there is no confirmed (by a daily closure) invalidation of the earlier breakdown higher values of USD/CHF are questionable and correction of the recent rebound should not surprise us.

If you enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Oil Trading Alerts as well as Gold & Silver Trading Alerts. Sign up now.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski
Founder, Editor-in-chief

Sunshine Profits: Gold & Silver, Forex, Bitcoin, Crude Oil & Stocks
Stay updated: sign up for our free mailing list today

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in