Recovery for USD/JPY?

August 27, 2016

The USD/JPY has been in a downtrend for quite some time now, but the pair has been testing the bottom from July recently. On friday we saw a strong move to the upside, which could mean that there's potential for a follow-through. 

On the chart below we can see that USD/JPY has made a nice long white candle, which means that buyers were in control. There's a good chance that the pair will continue to move higher, for instance to the first resistance levels around 103.460 and 106.150.

Ofcourse, a close below 99.750 would mean that the downtrend is taking control again.

There were a lot of moves on the intraday charts. Everyone was waiting for the Yellen speech at Jackson Hole, because she would say something about a possible rate hike. When there's important news, we often see very volatile trading. First a decline, then back up again to end lower again (see the remarkable upper wick from the candle). After those whipsaws, the uptrend was started. 

Because of the volatility, it's often better to use daily charts to plan your trades. The whipsaws from today wouldn't have any effect on traders who were already speculating at a rising USD/JPY. 

The above charts were made with the MT4 platform. Compare MT4 forex brokers.

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