The $USDJPY has officially wore traders out for the past few months as the breaks were sold into, each and every time. The technical picture has looked good for the bulls for a long time now but every attempt to break and sustain momentum was foiled.
Lets get the picture again. My thoughts and work on this pair seem to be on the side of a sustained move above 103. Then it should re-test the high 104 ranges only to break the bears backs towards 107.
The chart below shows a long wedged – coiled spring that has seen shallow pullback in the most extreme cases of the USD sell off. The base is rising , the moving averages are rising and the RSI is on a move above the peak RSI from the last attempt at the 100 mark. This should get the attention of some real players on the technical side. That wont be enough to sustain it. The pair needs a good leg up from the Yen smashing that I think is about to happen in the next few weeks. So I expect the dollar to stay firm and the yen to get crushed to peg new lows in the next 6-10 weeks. In the mean time, I trade this long side,core position and leg out at key levels and leg in at key dip support spots.
Note: The Bollinger Bands are snapping higher as price breaks above the top BB.
Nick Pirraglia
TradersThinkTank
