All markets opened today with huge price gaps after the first round of the French election. Eleven candidates ran for the presidential post and the two people who received the most votes were Emmanuel Macron and Marine Le Pen, as was generally expected. The two will compete again in the second round on May 7.
We saw all major currencies hit highs against the US dollar once the results of the first round of the elections became known, but the USD/JPY pair rose as well and reached 110.53, a resistance area for the pair.
The currency pair is trading inside a downside price channel. It returned back after it reached 108.10 - we bought it there because it was a strong support area, which is the down limit of the price channel and the 50% retracement percentage of the last upside wave. It's trading above a short-term trend line which likely would support the uptrend in the next few days.
The RSI indicator is still giving us the buy signal on the daily chart but we have an overbought signal on the H4 chart.
The Next Few Days
From this analysis of the daily chart and after today's gaps we have to wait for the pair to go back down to touch the ascending trend line. We can take a long position there and keep our first target at 110.28 and the second one at 111.65, but if we see the pair rise past the first target without retesting the trend line, we can buy it with a T/P at 111.65.
We have to be careful about any hot news this week such as the monetary policy and the exchange rate from Japan.
