Whilst not referring directly to the lines I have drawn on the Daily Chart above, I did say last time:
Further attempts may be higher but will run into solid resistance and could be rejected and possibly see prices lower...hence possibly neutral but with an interesting range.
Tthat is what we have gotten. The rally continued higher during the early days of May but found it hard going through the resistance bank 112.10 - 114.60 and ultimately failed to make a new high...usually a sign of bearish divergence in a rally. Since the 15 May, we've headed south which has culminated last Friday with a key reversal down on the Daily Chart and closing within two tics of the Long MA.
You know by now my thoughts one KRs on any JPY pairing...they are suspect...if you want to see what I mean. Look at the KR Up on the 23 May...it failed within three days! Nevertheless, the 11th - the high in May - had a bearish KR that worked so it may be that direction has a role in this...Bearish ones are likely to work at the moment. Add to this that we sill have a delinquent price gap between 108.48 -109.57 from late April and you might see where we are heading. In fact the whole second half of April could be seen as a Bear Flag/Halfway Hesitation pattern. If that's the case then I've put an 'X' where the potential target below would be if this pans out. Along with all these we have three out of four MAs heading lower so it is appropriate I think to move the bullet point above into mildly bearish. Bear in mind, it only takes consecutive closes over the bands 111.17 - 111.25 and 111.99 - 12.14 to turn it back.
Support is currently at 110.38, 110.21, 109.89, 108.48 - 108.56, 108.86, 108.60 and 108.11.
Resistance is currently at 110.51 - 110.60 (dynamic), 111.17 - 111.25, 111.71, 111.99 - 112.14, 112.24 and 113.38.
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