Currently generated a signal to sell the USDJPY pair as we see it re-entering a range. However, the Dollar Index still remains bullish so I would cap this trade to a very short term time frame with live monitoring.
It first appears to have broken out of the resistance zone, but re-enters as price makes a retest and continues lower.
I would place my take profit target just a tad above the 122.75~ price level so as to exit the trade before it enters the area of previous consolidation. Although the upper bound support zone lies at 122.60~, it is best to exit just before that point so we don’t compete with the rush of covers and long entries. The price actually consolidated for four hours at the upper bound 122.785~ price level so we should be looking to avoid that area of indecision as well.
Meanwhile, we take a look at the U.S. Dollar Index and continue to remain bullish. While price is still under the EMA-60 and experienced a daily change of -0.24%, the MACD is still making its way to a crossover. The RSI-14 crosses above the 50~ mark and we continue to expect it to continue pushing upwards.
The reward to risk ratio is just a tad above 1~ so take caution in placing this trade and actively monitor it. Euro pairs have been incredibly choppy lately as a result of the Greece debt repayment negotiations. While there isn’t a clear signal on Euro pairs, it is also difficult to use the correlation figure in predicting the short term Dollar strength.