Ages ago, September 14th to be exact, I posted that if you were shorting the Dollar/YEN, you shouldn't be because the YEN had been underperforming basically everybody at that time. The dollar was strengthening against the YEN, but not necessarily because the Dollar was strong, but mostly because the YEN was weak. At the time the Dollar was running in the middle of the pack, but the Yen was at the back. What did I think would happen? I said...
"My prediction is that we'll see a low-conviction rally up towards the supply zone (red rectangle ) with little to no momentum. If risk-off returns and investors begin purchasing the YEN than we'll likely see...sell-off.
For now I'm holding."
Was I right? Ahmm...maybe, but not yet. That Harmonic Pattern essentially failed, but as I said, I don't trade off of harmonics but they are sometimes useful to analyze structure.
The pair climbed all the way up to and through the supply zone, closing just outside of it the past two days. Price action today is SUGGESTIVE that we just might be reaching exhaustion, but (and this is a HUGE BUT!) the next few days will be critical. If price falls back into the supply area Bulls might have a difficult time sustaining upside momentum just below the 114.00 handle. Both the MACD and RSI are printing divergence, AT LEAST RIGHT NOW, which sort-of confirms what I suspected would be the case, namely, that price would rally as momentum began to wane.
Still though, I'm on the fence on this one. Price action is bullish, but might be reaching short-term exhaustion but we need two, maybe even three, consecutive bearish days before initiating a short.
"My prediction is that we'll see a low-conviction rally up towards the supply zone (red rectangle ) with little to no momentum. If risk-off returns and investors begin purchasing the YEN than we'll likely see...sell-off.
For now I'm holding."
Was I right? Ahmm...maybe, but not yet. That Harmonic Pattern essentially failed, but as I said, I don't trade off of harmonics but they are sometimes useful to analyze structure.
The pair climbed all the way up to and through the supply zone, closing just outside of it the past two days. Price action today is SUGGESTIVE that we just might be reaching exhaustion, but (and this is a HUGE BUT!) the next few days will be critical. If price falls back into the supply area Bulls might have a difficult time sustaining upside momentum just below the 114.00 handle. Both the MACD and RSI are printing divergence, AT LEAST RIGHT NOW, which sort-of confirms what I suspected would be the case, namely, that price would rally as momentum began to wane.
Still though, I'm on the fence on this one. Price action is bullish, but might be reaching short-term exhaustion but we need two, maybe even three, consecutive bearish days before initiating a short.
