USD/JPY Is Close To Deciding On Direction
Admirals | Aug 14, 2013 07:44AM ET
The USD/JPY, for the past few weeks, is in the downtrend that started at the end of May. On the daily chart, price is forming a triangle, which can be also viewed as a Head and Shoulders formation by some selling-orientated traders. Although the H&S formation does not look typical, it can also result in a downswing that could have a potential to start a trend change on this pair.
In the last few days, price bounced back from the neckline, which in the same time is a triangle support. This line is crucial for the technical situation on this pair, and if it will be broken, it will mean that selloff is about to start.
Currently, price is showing us that buyers are under control. Yesterday, they managed to break the 97.60 resistance (red line), which started further upswing. Price is aiming for the upper line of the triangle; and breaking this line will start another bullish wave according to the long-term trend. At the same time, this will deny the possibility of a H&S formation, which should transform some of the sellers into new buyers and boost the movement upwards.
The scenario for USD/JPY should be neutral, as price is in the middle of the triangle. Sentiment change should occur once price breaks one of the lines of the triangle.
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