The price has maintained above the 100.80 support zone with a relatively shallow retracement within the bullish pinbar. This in itself suggests there was strong buying down at 100.80 and a case for bullish momentum.
USD/JPY Weekly: Maintained above 100.80 Pivot low, and bullish picture is building
The retracement from the 105.3 top stalled at the 50% level where we have now seen a slowdown in the decline. What provides a little extra confidence is that we are within a retracement from the market top at a relatively stable speed. We may decline from the top though. I would expect to see more of a market shock/sell-off from 105.30 with subsequent whipsaws, but this has not been the case.
For this reason I'll then begin to seek bullish setups on the daily timeframe to bring us back in line with the dominant bullish trend.
USD/JPY Weekly Chart" title="USD/JPY Weekly Chart" width="474" height="242">
USD/JPY Daily Chart: Breakout of bearish channel opens up 103, 103.70 and 105.30
Since the 105.30 top we have traded within a bearish channel. Another clue that this is merely a correction is how the price swings overlap regularly - if this was an impulsive move I would expect to see more of a directional move between swings with shallower retracements.
I have highlighted the swing lows with green arrows and yesterday's close suggests the possibility of a swing low. We close above 101.80 S/R with a candle with a large-bodies bullish hammer. Therefore I would take any bullish breakout of the bearish channel as a sign to initiate long positions with targets being 103, 103.7 and 105.30.
If we see these targets being hit I will then perform a larger view analysis for future targets above this level.
USD/JPY Daily Chart" title="USD/JPY Daily Chart" width="474" height="242">
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