Near-term Setups in USD/JPY, GBP/USD and Ethereum
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USD/JPY 240min Chart
Last week we noted that USDJPY was testing a critical near-term resistance zone at 114.30/50 with a favored break below parallel support extending off the September lows needed to shift the focus lower in the pair. A late-week break has USDJPY trading lower with the decline largely holding within this near-term descending channel formation. The focus remains lower while below the weekly open at 113.45 with near-term support targets eyed at 112.26 and the 38.2% retracement / channel support at 111.90.
- A summary of IG Client Sentimentshows traders are net-long USDJPY- the ratio stands at +1.08 (52.0% of traders are long) – Weak bearishreading
- Long positions are 2.9% lower than yesterday and 0.3% lower from last week
- Short positions are 3.9% lower than yesterday and 23.1% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bearish contrarian trading bias.
GBP/USD: The focus is on a pending breakout in sterling as the monthly opening-range continues to take shape just above a critical slope support barrier. The immediate range of interest is 1.3063-1.3221 with a topside breach favored. I highlighted this setup in today’s Scalp Report.
Ethereum prices reversed off our initial resistance target today at 338. Interim support at 321 with the focus remains higher while above the November open at 304. A breach higher targets subsequent resistance objectives at 349/50 backed closely by 355 & the 61.8% extension at 362.
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---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex or contact him at email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.