The US dollar rose last Friday against most major currencies ahead of the President's Day long weekend which would end today, but the Japanese yen was stronger than the dollar, so the pair recorded a new low last week at 112.55.
The USD/JPY pair is trading now at 113.10 after it declined to the lowest price last week at 112.55 to retest the broken trend line and rose back again. Now the pair is trading between the demand zone at 111.80 and the resistance area at the SMA at 113.32 so we have to wait for the pair break the SMA and close H4 candle above it to buy the pair. The RSI indicator is giving us a buy signal and so does the stochastic indicator.
The Next Few Days
Based on this analysis we can buy the pair once it breaks the SMA and trades above it - we should keep our first target around the previous top at 114.70 and the second target at 161.8% Fibonacci from the last down wave from 114.92 to 112.59, so our extension percentage will be at 116.20, unless the pair breaks the trend line again and trades below it, in which case we would sell the pair to 109.40 at the 50% fibo from the uptrend wave which started on September 27.
We have to keep an eye out for any economic news that may effect the market such as the FOMC meeting next Wednesday and Unemployment Claims on Thursday.
