A rejection at the top is formed at the 113.66 in the USD/JPY pair. Intraday bias is turned neutral first with the pair trading at the 113.66 resistances intact. A further decline is expected. A decisive break of the 113.23 will target at 112.96 levels next. However, a break of the 113.66 level will dampen our bearish view and turn bias back to the upside for the 113.93 level instead.
In the bigger picture, the current development argues that the USD/JPY pair has defended at the 113.66 level with resistance intact. We favor the case that fall from this levels must be seen as a correction pattern. Breaking of the pair at the 113.23 level will further affirm this bearish case as a larger decline from the 113.66 level is not completed. However, on the other hand, a firm break of the 113.23 level will indicate a further downside in the upcoming session.
The recent run higher on the greenback has been incredible. A huge accelerating bull run has seen the market burst through the key until now. The market has been limited by the resistance band at the 113.66 level on numerous occasions in the past candles but the dollar has lost its momentum and driven a breakout. Chasing the yen here would though be a move filled with the significant rewards. The pair’s momentum is clearly incredibly strong. The pair staying with the bearish run may be risk in the very near term. However, if profit taking hits, it could be a sharp reversal. We keep watching for exhaustion signals the pair seems to be already exhausted. On the oscillator, it is also notable that the entirety of today’s session took place outside the 28.0 standard deviations.
The bulls were looking tired before the sharp gains, but again the move looks stretched. The pair closing back inside the 50 levels would be a corrective signal. A move back below towards the 28 level on the four hourly chart would now be a corrective signals.
The four hourly chart support turned resistance around the breakout at the 113.23 level. The pair returns to test the bearish channel’s resistance after leaning on the intraday bullish support line that appears on four hourly charts. The pair accompanied by its stochastic reach to the correction areas and waits to motivate the price to rebound bearishly to break at the 113.23 levels. This offers to active the negative effect of the bearish pattern formed by the mentioned intraday channel followed by pushing the price to continue the main bearish trend.
Therefore, we believe that the chances are valid to trade negatively in the upcoming period conditioned by the price stability below the 113.23 level. This reminds you that our main targets begin at the 112.96 and extend to 112.693 levels.
The pair’s expected trading range for today is between the 113.39 resistances and 112.96 supports levels.
Expected trend for today: Bearish
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