USD/JPY Weekly outlook – 30 Jan – 03 Feb 2012
After a slow start to 2012 the USD/JPY finally came to life last week with the bulls initially pushing the pair higher, quickly followed by the bears gaining control once again dragging the market back down. Since early November of 2011, the Dollar has been stuck in a range against the Yen producing a slow moving market with few trading opportunities.
With the strong and obvious downtrend this market has been following, shorts in line with current momentum would be preferable. A look at the weekly charts shows the pair closing last week with a strong bearish pin bar rejecting the upper level of the range.
Unfortunately, the price was unable to close below the lower level of the range which could hinder the chances of taking any shorts at this current level.
However, with the strength of last weeks pin and the rejection of the upper level of the range we will be looking to short this market back down to the 75.50 area providing the market can break and close below the lower level of the range in the coming week. A break below this level would suggest further bearish momentum to be expected.
With the month coming to an end on Tuesday it would be wise to take a look at the monthly timeframe to better understand the markets movements. At the time of writing this the monthly candle is forming a bearish pin bar (similar to the weekly TF). Should the pin hold until the end of the month our bearish outlook would be further supported.
