USD/JPY bullish correction
The pair bullish sentiment continues at the start of March, however, it immediately receives selling pressure and loses altitude until it reaches 110.00. A relief bounce happened near the end of the month following positive news from trade talk.
In March, The Fed mentioned that the central bank does not see further rate-hike this year. It is an extremely dovish remark and sends U.S dollar down, but the inversion of bond yield send fear to the market and reverse the U.S dollar direction upward.
The trade talk between U.S-China continues to give a positive sign in April which helps boost USD/JPY. Traders and investors will wait for further development of the trade talk in April to determine the USD/JPY direction.
Click here to read USD/JPY March 2019 analysis
The direction of USD/JPY is upward and may test the area 112.00 – 112.50. If a breakout happens then we could expect the pair continue toward 114.45 – 115.00. But, a rejection from 112.00 – 112.50 area might bring the pair down to test 108.50 and 105.50.
USD/JPY rejected from 112.00 – 112.50 area in the previous try. The downward movement brought the pair down to support 110.00 before bounce happen. At the current time, we could see bullish candlestick challenging the top of the bearish candlestick. Traders will wait for a breakout above the candlestick and 112.00 – 112.50 area before USD/JPY long-term trend could change to bullish.
The bullish channel on the daily chart broken and the pair slide down to test 110.00 support level. It is bounced and currently traded above 111.00. Will the pair continue upward and test 112.00 – 112.50 resistance level?
A short position could be taken from 112.00 – 112.50 area after a bearish pattern formed. (Same strategy)
A long position could be taken near 111.00 when retest happens and produce a bullish pattern.