USD/JPY Begins to Pullback from ¥115.50

USD/JPY (¥114.310)

The dollar/yen has pulled back after running out of steam neat ¥115.50. See the above daily MT 4 chart. We are now seeing the formation of a bearish engulfing candlestick just below that level. If we confirm this bearish reversal with a daily close lower, then we could see a pullback back towards ¥112.40. Still, any correction lower is not going to be prolonged as we have a medium term uptrend that is quite strong.

Now, let us take a look at the 4 hour MT 4 chart below. We are noting the formation of Dojis as day traders are hesitant about adding more sell orders. We see a number of Doji candlesticks, which have been marked. This chart does not indicate any strong bullish reversal signals, so a recovery is not in the cards. We could now see a period of sideways trading or consolidation.