Here we are, an exciting moment for Forex and Binary Options currency traders as the 120 level has been broken to the upside and the sky seems to be the limit for the USDJPY pair.
Why not, considering the quantitative easing that is ongoing in Japan and the upcoming tightening process that is about to start in the US? The other day we had Fed member Lacker saying that the most appropriate would be for the Fed to lift rates next June this year.
However, how much is too much? What would be an educated guess for the trip in the USDJPY?
Well, I would say the key stays with the bigger time frames in the sense that the daily chart shows a terminal impulsive move that was the last leg of the move lower all the way down to the 75 level.
But a terminal impulsive move is, then again, always completely retraced, and just like that, we have a target for the move to the upside, as the terminal impulsive move started around the 124 level. We’re quite close.
Moreover, looking at the structure from the lows now to the upside, it seems the market is forming a zigzag as an x wave, and now we’re running the c wave after a and b are completed.
This means after the 124 we should look for a consolidation but even on that consolidation pattern buying dips should be favored as this implies most likely a contracting triangle or a simple zigzag or a flat.
From a fundamental point of view, the trigger of this move was last Friday’s jobs data as it came way better than expectations and market participants jumped on the USDJPY as the pair that is reacting the most on that kind of data.
All in all, I am still bullish on the USDJPY until 122.50-123 levels are reached. This is where we should look at exhausting signs as the first clues to consolidation.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
