USD/JPY
Strategy: Pending Short
Last week we noted that USDJPY may turn lower with prices showing a Rising Wedge bearish reversal pattern bolstered by negative divergence on the RSI oscillator. Indeed, the pair put in a Dark Cloud Cover bearish reversal candlestick formation and broke down to find initial support at 90.79, the 12/04/09 swing high. Risk-reward considerations point against entering short with prices squarely at support. Rather, we will look for entry opportunities on either a daily close below 90.79 or an upswing to re-test resistance at the major falling channel top (now at 92.80).
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