Technical outlook:
The USD/JPY 4H chart might be now indicating that an intermediate top is in place at 109.50 levels. The pair had peaked through 109.50 levels before pulling back lower forming the evening star candlestick pattern, pointing to a short-term change in trend. Please note we are only suggesting a counter-trend drop lower towards 108.00 levels before the rally could resume. At the moment USD/JPY seems to be retracing the Friday drop and should find resistance around current levels 109.25/30 soon. Looking at the wave counts, the pair seems to have completed waves 1,2 and 3 as shown here and could be underway for a corrective wave 4. Normally if the above wave count holds to be true, the 4th wave would terminate at the Fibonacci 0.382 support which is seen at 108.00 levels for now. Aggressive traders who took short positions on Friday can hold for now.
Trading plan:
Aggressive traders remain short with stop above 109.60, target 108.00. Conservative traders remain flat for now look to go long again around 108.00 levels..
Fundamental outlook:
Watch out for the German Consumer Price Index and US PCE Core to be out today between 08:00 AM to 08:30 AM EST.
Good luck!The material has been provided by InstaForex Company - www.instaforex.com
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