USD/JPY – The Bears Are Near
USD/JPY showed a strong sign of bear pressure on Tuesday last week when the JPY ripped to the downside for a brief moment. At this stage of a bull run, this is likely a sign of weakness and a reversal to the downside lurks. My recent DXY analysis shows the potential for a fall below its 106.000 support, and the JPY analysis shows signs of a reversal to the upside.
The Weekly candles still hover above the the 9EMA at a price of 147.300. If the price makes contact with and bounces off of the 9EMA, then we have confirmed more bullish action which will set my sights for the previous high resistance at 152.000. The RSI is touching the overbought line, but there is still room for more action to the upside.
A Weekly candle closing below the 9EMA is a strong bear signal and may indicate a minor pullback is in order. Price targets in this scenario put us at 145.000 where the price last touched the top of the bull channel and puts us back at the bottom of the bull channel. With the RSI touching the overbought line, there is plenty of room for a move to the downside.
Longs at this stage on this timeframe are risky. I would focus on lower timeframes such as the 4HR and look for a bounce off of the 200EMA to the upside.
Trade wisely and let us know what you think in the comment section below!
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