Forex: USD/JPY, watch the 20EMA for clues
FXstreet.com (Barcelona) - The Yen is again the worst performer currency at the start of the week, with USDJPY breaking through 89.50, EURJPY violating the round number 120.00, and the list goes on...
There surely must be plenty of laggards out there still deprived of entering this juicy market and make some decent pips, and they must be wondering where might be the levels to jump on the 'sell the Yen' bandwagon.
Technically, a short term pattern can be observed off the H1 chart in USDJPY, by which a tight relationship has been established that sees the price bounce with vigor every time the 20ema is tested, commanding the resumption in buys.
Following the double bottom at 86.80 on Jan 9, price produced a 3-hour candle impulsive move through 87.50 topping at 87.72, from where the first pullback saw the pattern first manifested.
On the resolution higher en-route to 88.30/40 resistance on Jan 10, the 1-day congestion in prices that followed was characterized by the same pattern, with price respecting the downside by the 20ema, with only one marginal violation on Jan 1 at 16GMT before the rally followed its course. Once the 89.30 was achieved last Jan 11, the same behaviour emerged as the A-B-C correction lower saw bulls rejoining the party...guess where? at the 20ema - this time the violation was only of 4 pips.
Patterns are observed every day, in any time frame. This one has been giving very accurate entry levels for USDJPY longs, whether or not it may continue to provide clues in the near future, that should be left to trader's discretion to decide.
There surely must be plenty of laggards out there still deprived of entering this juicy market and make some decent pips, and they must be wondering where might be the levels to jump on the 'sell the Yen' bandwagon.
Technically, a short term pattern can be observed off the H1 chart in USDJPY, by which a tight relationship has been established that sees the price bounce with vigor every time the 20ema is tested, commanding the resumption in buys.
Following the double bottom at 86.80 on Jan 9, price produced a 3-hour candle impulsive move through 87.50 topping at 87.72, from where the first pullback saw the pattern first manifested.
On the resolution higher en-route to 88.30/40 resistance on Jan 10, the 1-day congestion in prices that followed was characterized by the same pattern, with price respecting the downside by the 20ema, with only one marginal violation on Jan 1 at 16GMT before the rally followed its course. Once the 89.30 was achieved last Jan 11, the same behaviour emerged as the A-B-C correction lower saw bulls rejoining the party...guess where? at the 20ema - this time the violation was only of 4 pips.
Patterns are observed every day, in any time frame. This one has been giving very accurate entry levels for USDJPY longs, whether or not it may continue to provide clues in the near future, that should be left to trader's discretion to decide.
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