Wave Analysis:
Earlier the previous trading day, the impulsive wave (3) extended slightly to the upper side before coming to an sudden halt around 113.19. We expect the downward rally that began yesterday to be a mere correction of the impulsive wave (3) to the lower side but should not go beyond the support zone 112.290-112.15, where we'll be looking to re-buy the impulsive wave (3) to the upper side but should not go beyond the resistance level 114.00. If this level is broken, then the price could rise even further towards 121.00. This pair should be traded alongside CADJPY, CHFJPY, AUDJPY, and NZDJPY. These pairs have a strong positive correlation of up to +63% and will move in the same direction during this intraday.
Trade Recommendations:
Re-buy this pair around 112.290-112.15 with an ideal target at 114.00.
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Technical Observation:
Even after a sharp rise towards the highs of 113.20, Usd ended up closing just a few pips above its opening price. This is a bullish exhaustion indication and unless the price close above 112.84 by the close of this day, I expect the price to plummet towards 108.24. I expect the upper trend line to act as a resistance to any movements to the upper side, thus, unless the price clearly breaks above the trend line with a big green candle, I remain optimistic that this Usd could still plummet. If this trend line is breached, then I expect a rise towards 118.00.
Technical Levels
Resistance levels
R1: 113.35
R2: 114.2
R3: 115.98
Pivot
112.41
Support Levels
S1: 108.84
S2: 110.63
S3: 111.57
Trade Signal
Look for a short position towards 108.24
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