USD/JPY just dipped back to the 141.00 area!
Are we looking at a pullback from an uptrend?
Or a reversal in the making?
I don’t know if you’ve noticed, but USD/JPY has been making higher highs and higher lows since mid-July after the pair found support from the 138.00 psychological handle.
The 142.00 area was an effective resistance though, and now the pair is back to consolidating at the 141.00 zone.
Are we seeing a short-term reversal or just a pullback from USD/JPY’s uptrend?
Technical indicators favor more buying as the 100 SMA sits just under USD/JPY’s current prices. Not only that, but USD bulls could also take advantage of the 38.2% Fib retracement and trend line support near the current prices.
Buying at current levels or at the first signs of bullish momentum would yield a good risk ratio especially if USD/JPY ends up making new weekly highs in the next trading sessions.
Don’t discount a downside breakout though!
Make sure you have a trading plan mapped out so you don’t miss out on either a bullish or bearish scenario!