USD/JPY on verge of extending double top formation, major trend exhausted at 23.6% Fibos - Boundary binaries to trade:
Chart pattern: USDJPY -0.31% forms double top chart pattern that is bearish in nature to signal more weakness in the days to come. Observe failure swings at top 1 at 113.752 and top 2 at 113.638 levels.
Stiff resistance zone is observed at 112.869 to 113.634 areas, we’ve seen the failure swings at this juncture couple of times in the recent past.
Thereby, you could observe that the momentum in the previous bullish swings is shrinking away.
Both RSI & stochastic curves are indecisive on monthly and signaling selling pressures on intraday terms, while, the trend indicators (7&21 DMAs and MACD ) have also been indecisive. One could trust the indications given by the leading indicators on daily terms only upon a decisive breach below 7DMA level.
While the major trend stuck between 23.6% and 38.2% Fibonacci retracement levels (refer monthly plotting), the trend on this timeframe shows failure swings exactly at 23.6% Fibonacci levels couple of times in the recent times.
On the flip side, it has tested strong supports at or around 38.2% levels. In this oscillation, the pair is hovering on EMAs (refer monthly plotting).
The bulls in the prevailing trend seem to be struggling for the momentum, while the trend direction has also been wavering.
Trading tips: Contemplating above technical rationale, we advocate buying boundary binary options with upper strikes at 112.869 and lower strikes at 112.473, this strategy is likely to add magnifying effects to the yields as long as the underlying spot FX remains between these two strikes on expiration.
Currency Strength Index: FxWirePro's hourly USD spot index has shown -147 (which is highly bearish ), while hourly JPY spot index was at -72 ( bearish ) while articulating at 06:34 GMT .
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