Sunday, May 30, 2010

USD/JPY: The Pullback to the Lower Trendline of a Broken Wedge Rising Will Mean a Continuation of the Current Bearish Trend?

(Click on the Daily chart to enlarge it)
On May 20th the JPY broke down the lower trendline of an important Wedge Rising (see the "A" lines...) and during the whole last wek prices gone up just to do a pullback to this lower trendline that now became resistance, even forming a Spinning Top last friday May 28th, thus showing indecision in this important resistant level.
Therefore our strategies are:
* SHORT below 90.60, which will confirm all the patterns mentioned above and consequently the continuation of the current trend.
* LONG above 91.60, which will indicate a false breakout of this Wedge Rising. If that happen, prices might go for the top at 95.00