Tug of war between USD/JPY hammer and hanging man , can bulls hold onto channel support?:
A Glance at Technical Analysis:
USDJPY minor trend has been spiking through rising channel , more slumps likely as both leading oscillators indicate overbought pressures and the current price has slid below DMAs. Bulls have tested support at channel baseline in the recent past, but for now, bears are now attempting to counter on bearish candlestick patterns, consequently, current prices are nudged below 7DMA, further slumps seem to be most likely as both leading oscillators ( RSI & stochastic curves) indicate overbought pressures.
On the flipside, the major trend has been in the consolidation phase, more rallies likely upto 61.8% Fibonacci levels on bullish momentum, while trend indicators indecisive, we see bullish invalidation on retrace below. Hammer pattern has occurred at 106.260 levles, ever since then the minor price trend has been spiking through rising channel , hanging man has occurred at 112.942 levels.
Well, we see stiff resistance at 113.163 and strong supports at 112.168 levels (on daily charts ).
On major trend, bulls seem to be exhausted at 61.8% Fibonacci levels from the lows of June 2016, (refer monthly plotting), the trend on this timeframe, is stuck in tight range.
Trade Tips: Contemplating above technical rationale, it is wise to bid tunnel spreads with upper strikes at 112.856 and lower strikes at 112.168 levels. The strategy is likely to fetch leveraged yields as long as the underlying spot FX keeps dipping but remains well above lower strikes on the expiration.
Currency Strength Index: FxWirePro's hourly USD spot index was at -45 (which is bearish ), while hourly JPY spot index was at 64 ( bullish ) at 07:00 GMT .
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