USDJPY – Down Wave Analysis: USD/JPY is currently consolidating with the contracting wedge. As long as this pair remains within this wedge, we choose to sit on the sidelines and only buy or sell depending on the direction of the breakout. A break above to the upper side will culminate into a possible bullish price movements towards 103.70 while a breakout below the wedge will lead to a possible bearish price movements towards 103.34. Although chances of breaking on the either sides are pretty much equal, the probability of breaking below the wedge is higher since the other negatively correlated pair Euro and GBP/USD are pretty much bullish and will head to the upper side. Trade Recommendations: Expect a possible breakout below the wedge to go short with an ideal target at $100.
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