USD/JPY - The pair is at key levels but in the middle of a long range. Taking this into account, transactions from current levels will be risky. But let's take a look at the possibilities the couple currently offers. On a daily schedule, the price is a short-term downward channel and is currently at its lower limit. Since today negative sentiment in the US has remained and the stock market has fallen, after the strong start of the US session, Short deals remains more likely. In support of the short idea, the H4 chart gives us a more detailed picture of the current horizontal breakthrough. In the test after the break, we have a bearish Pin bar + a strong down impulse, confirming that the traders are positioned short of the current levels. In terms of indicators, Dem (8) is in the over-sales area, not indicating a reversal, and Sequential counts downwards in the downward direction - Short-remains. However, if we see a daily closing over the horizontal, it will be considered a false breakthrough - a strong reversing signal. In this case, it is best to be Long on USD but short-term with SL: 110.10 JPY. An ascending impulse will give us a better price to add to long-term short positions from the top.
Fundamentally USD remains under pressure and JPY is able to record profits, given the temporary shocks on the stock market. Short-remains more likely.
Alternative scenario: If the price closes above the top of the previous bar, the negative scenario will spoil and we may see a USD growth.
Jr Trader Petar Milanov
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