USD/JPY: First target achieved, what price is next?
Hello Traders and welcome back to another trading week with us here on EverythingFX!
The US Dollar is currently trading at 107.058 against the Japanese yen during today's London session!
It is very important to gauge a higher timeframe point of view when looking at a currency pair, On the weekly timeframe, we have had a nice rejection off of our resistance of 108.000 where we have seen a major bearish engulfing taking out the prior 3 weeks of price action. That is a fairly large shift in momentum which took us right below our first intra-day target at 107.000 which was a great 100 pip trade from the rejection off the highs as stated in our previous article!
Where to next you may be wondering? It is important to remember Dollar Yen is a very risk correlated pair and we need to approach it with caution this week as we know very well China and the US are meeting for further Trade negotiations. Furthermore, let's take a look at where we could head next based on a technical picture! If we were to continue further to the downside I would like to see some sort fo retracement in price, as shown in the screenshot above, a re-test of 107.450 would be great. Upon approaching this level I will personally be waiting for any bearish reversals before eve considering a short position! With taking a short from those levels I will be looking to target 106.000 as my first target providing us with a great risk to reward to the downside! However, if we have a shift in risk sentiment I don't see why we can't be trading back at 108.000!
Fundamentally, Traders are on the edge of their seats this week with the odds of having a further rate cut from the Fed have now increased! So it will be interesting to see what Fed Chair Jerome Powell has to say tomorrow! Do stay tuned to our market news section, social media accounts and twitter feed for further updates! Have a great trading week!