Forex Marketz Daily Forex News – Fully Markets Update
USD/JPY (121.046)
Some talking points in this Forex market:
- The current US Dollar strength could coincide and merge with the Bank of Japan rate decision.
- Price action is finding resistance at the 200 day moving average.
- Trade Strategy: Stand aside
The USD/JPY Forex market is getting ready to break above the August 24 high or just before the August 24 close at 118.29. This price action is akin to a move that will precede a bigger move. Why? Usually the best indicator of a bounce higher or volatility is inactivity. Which direction will this breakout occur? If prices can close above the 200 daily moving average (DMA) after gapping below on August 24, the answer could be to the upside. Please refer to the below USD/JPY daily MT 4 chart for today’s technical analysis.
Technical Analysis
Let’s look at today’s USD/JPY technical analysis. There was a brief period of excitement when the key support at 118.60 was broken. This occurred on October 15, but prices recovered as the market did not close below this level. We needed to see a close below this level to indicate a more bearish market was ahead for the US Dollar. As it turns out, the price point (close) set on October 15 was the new monthly low and prices are inching higher and now hitting their highest level since August. The next big technical resistance level is at 121.89/90.
Trade Strategy
I will opt to stand aside from now and will explain why. A trader must understand market direction in order to place a trade. Right now the USD/JPY Forex market is trading in a rather narrow range. Not very helpful at providing that directional hint. I am waiting for a breakout to occur. If the next breakout from consolidation is higher, then the focus will be long towards 123.60 then the technical level at 125.84. Support will remain at 118.60 thanks to the aggressive move higher. Only a break below that technical level will shift my view bearish. Right now, I will remain flat in the USD/JPY Forex market waiting for a potential breakout for a long position.
