USD/JPY: 112.00 On The Cards Should We Break Our Trendline
Another great day for our members as we saw some great movement across many pairs and USDJPY played out as predicted.
Since the start of the week we saw the bulls manage to creep higher and higher towards the key monthly resistance level of 114.00. On Monday we saw price action look like it was creating a new high and possibly a reversal as we saw an Evening Star formation formed on the 4-Hour chart, with a very nice Shooting Star and a bearish engulfing candle. This formation however was created in no-mans-land, as this was not rejection from a key level or previous resistance and proved to be a bear trap for any eager short sellers.
On Tuesday we got even closer to my long trade target from last week of 114.00 (100 PIP trade) and as mentioned many times before, if we are close to a key monthly level, the level is usually hit. This level was taken out yesterday at 4pm GMT as the volatility hit the market when the Federal Reserve had talks in America, resulting in the weakening of the US Dollar and presenting us with a great opportunity to short this pair from the monthly key level to now be 80 PIPs in profit.
We are now sitting on the first point of support around the 113.20 area and closing in on trend line support which I expect to be met. If we manage to break our trendline we will see a further decline to 112.000.