USDJPY is at the bottom of the trendline now, at a contentious point right now. Looking at the chart, one can argue that the trend line has been breached. I would interpret it as otherwise, with the tip of the shadow as the "ultimate" level to interpret the trendline as effective. Trend strength wise, there is still no evidence of rejection to suggest a bounce any time soon. In addition, the dollar index DX, is also approaching a historical critical support (indicated by the chart above). And there are no price action to suggest that the dollar is going to bounce any time soon.
My view is that this trade will go either way, and the movement should bag some nice pips. For me to consider the bullish bounce for UJ, I would want to see signs of price action rejection on the DX, and also on the UJ daily. Conversely, if the current price action holds, the trend is definitely towards the bearish side (i.e. a break down of UJ along side the break of of support in DX).
I am keeping this pair in tight view, and is waiting for confirmation signs to suggest the tipping over to either side. Watch for this...
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