19 May 2016, USD/JPY
USD/JPY is currently trading with a bullish bias. Yesterday, the pair broke above a key resistance level 109.34, headed long and even broke above the next key level 109.95. Following this breakout, we are very reluctant to go short, instead, we expect further movements to the upper side. The anticipated upward rally should be the continuation of wave (5) but should not close above the resistance level 111.037, a clear breakout above this resistance line will lead to an acceleration to the upper side. This pair should be traded alongside USD/CAD, USD/CHF, GBP/JPY and EUR/JPY. These pairs have a strong positive correlation of up to +0.89 and will likely move in a similar direction during this intraday.
Remain long for now with your target at at 111.03, or wait for a clear breakout above 111.03 to go long with your target at 111.85. A clear rebound from 111.03 will call for short positions with targets at 109.95 and 109.34