The USD/JPY pair had an eventful day during the session on Wednesday, only to end up essentially unchanged. The pair is currently right on the edge of a downtrend channel, and the piercing of it certainly would have a lot of traders excited. However, by the end of the day we had pulled back to form a doji.
With this candlestick, there is an obvious buy signal if we break the top of the range. On a brake lower, we simply see far too much in the way of support all the way down to the 80 handle, and as a result we aren’t selling. Also, later this week we could see the Bank of Japan increase its easing in the form of an expansion of the bond buyback program, and this in turn should weaken the Yen overall. Because of this – we are only buying on that aforementioned break higher.
Written by FX Empire