In our last report about the USD/JPY pair we recommended selling the pair around 110.75 after breaking the trend line from last April and the prices hit our two targets for this position at 110.23 and 108.34. Today the pair opened at 109.51 with a down gap by more than 60 pips due to the geopolitical tensions from North Korea and Japan.
The pair is trading now at 109.66, close to the broken trend but still remaining below it today, which is a sign of the negative movement in the next days. The prices are trading between key support and resistance areas at 108.50 and 110.75. It’s expected that the pair will decline to the support level and may break it, but if the pair returns back to trade above the trend line again it will go up to the 50% of the down wave to reach 111.40.
The Next Few Days
After we saw the prices are back below the trend line again, we can take a sell position at the current level at 109.66 and keep our target at 108.50. If we see the pair go back to trade above the trend line we have to close the sell position and take a buy one instead, keeping the target at 111.40.
This week we don’t have much hot news from the United States, nor Japan, except for the ISM Non-Manufacturing PMI on Wednesday and the Unemployment Claims on Thursday from the USA.
