10 May 2016, USD/JPY
USD/JPY is currently trading with a bullish bias. Yesterday, the pair broke above the triangle at 107.37, headed long, but is yet to reach our target resistance level 109.10. Although the intraday stochastic is trading along its overbought level of 80, we still expect the price to continue to the upper side but should not go above 109.10. A clear breakout above this level will push the price further to the upper side, while a clear rebound from this level will lead to an acceleration to the lower side. Ideally, we expect the level 109.10 to the mark the end of wave , but should be the beginning of a corrective three wave cycle. This pair should be traded alongside, EUR/JPY, USD/CAD, and AUD/JPY. These pairs have a strong positive correlation of up to +0.93 and will likely have a similar price action during this intraday.
Expect an upward acceleration towards 109.10. If you are not long already, wait for a buy position above 109.10 with your target at 109.84. Only sell upon a clear rejection from 109.10. The sell position should have a targets at 107.91, 107.37 and 106.23.
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