(MENAFN- DailyFX) The following set-ups are a couple of the higher conviction opportunities we looked at in , and since then have broken through critical levels.
Check out the forecast for our intermediate-term fundamental and technical perspective.
USD/JPY (Wedge, 2015 t-line break) USD/JPY has been working on an ascending wedge for the past 6 weeks or so, edging closer and closer towards a trend-line running down from 2015. Yesterday, it broke out of the wedge and currently trading above the 2015 trend-line.
While price is above the long-term trend-line on a daily basis, a weekly close above the trend-line will go a long way towards adding conviction given the trend-lines 3 years in duration. Full clearance should have USD/JPY rolling towards the mid-11400s/500. The preferred approach on this end is to look to dip opportunities given the already extend
A break back inside and below the lower-side of the wedge and trend-line off the March low will negate the bullish breakout, and given the fake-out breakout, potentially bring into play a powerful move lower. Low probability given the current strength, but we'll update on this scenario should it come to light…
USD/JPY Daily Chart (Breakout from wedge) USD/JPY Weekly Chart (2015 trend-line) Check out these 4 core tenets for
CHF/JPY Wedge/Inverse H & S Breakout CHF/JPY has also been working on a similar wedge formation, but with a twist. Price action since March has also taken on the shape of an inverse head and shoulders, not an all that uncommon occurrence for an H & S to also resemble a wedge, or vice versa. In any event, the top-side breakout brings the same so what you call it doesn't matter, it's just word play.
The measured move target (MMT) based on the depth of the pattern(s) point to a move near 11600. Prior to the MMT is a trend-line running down from the January 2015 high (created shortly after the SNB fiasco). Given this is a real level and not one based on pattern symmetry, we'll run with that as the first line of major resistance to watch, and thus the initial target.
Right now, CHF/JPY is contending with resistance from last year ( & 200-day), but beyond there, there isn't any meaningful price levels to keep CHF/JPY from trading to towards the target. A failure back inside the pattern, and ultimately below the trend-line off the April low would be total invalidation and open up the possibility of a short trade (similar to USD/JPY on a failure).
CHF/JPY Daily Chart (H & S/Wedge Breakout) ***Updates will be provided on this idea and others in the trading/technical outlook webinars held at 9 GMT time on and .
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---Written by Paul Robinson, Market Analyst
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