Forex Video Briefing (10/13) – USD/JPY: Pending Bullish Attempt
The USD/JPY has been consolidating since hitting 110.08. Even a strong NFP report failed to push the USD/JPY back to 110.00. Since the second failed attempt to clear 110, USD/JPY has been drifting lower, breaking below a key support pivot at 108.00 and therefore showing a price top attempt.
The FOMC meeting minutes last week showed the possibility that the bank might not even raise rates by mid-2015. Essentially, global risk is becoming an impediment to the Fed raising rates. This news can be enough make USD/JPY’s high at 110 stick for a while.
With a price top, and a reason to believe USD/JPY will continue to consolidate, we should get ready for a bullish attempt as an opportunities for sellers. The 106.80-107 area should be considered support, and if there is a bullish divergence with the 4H RSI, we should anticipate a bullish attempt. A break above 107.60 at this point can push above a falling trendline and signal bullish continuation.
Now, in the near-term, this is a viable bullish continuation play, especially with the prevailing trend being bullish. However, we should limit the upside to 109, around which we should anticipate sellers. The 4H chart shows that the A break above 109 signals an attempt to break 110.08. In this scenario, sellers should wait for that 110 handle again with anticipation of a possible clear-out above 110.08 before a bearish correction attempt.