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Equiprobable scenarios

11 April 2016, USD/JPY

Daily chart: pair is substantially oversold, bears have kept the price outside of Bollinger envelopes for long - all this anticipates correction. But at the same time, very active ADX votes for the trend (ie south) direction. It makes no sense to get against the engine. Correction will obviously take place, but touch of new Lows is a more probable event

Н4: the bottom Bollinger band is dropping, so we we expecta continued bearish movement

Н1: extension of envelopes plus a very active ADX. We are confused with bullish Over&Under. This makes drop and growth to be equally probable plans. Bullish chances will be offset can only after a recent low (107.66) is broken

Expectations: The main scenario - a breakthrough to 107.00 The alternative scenario - growth from current levels to 108.56 (and possibly to 109.18)

Trading solutions: for bulls - buy with a Stop set at 107.66, targeting 108.56 and 109.18

for bears - look for downward signals to 108.56 zone, with a view to 107.00

Aleksey Panasenko
FreshForex Analyst
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