USD/JPY Broken Diagonal Line is Now Potential Resistance

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eliottWaves_usd-jpy_body_usdjpy.png, USD/JPY Broken Diagonal Line is Now Potential Resistance

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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FOREXAnalysis: After numerous false starts on the downside, beginning with the 2/25 collapse, traders are conditioned to buy the dip. Eventually, this mentality will aid in accelerating a nasty decline, but within a multiyear uptrend. There are a lot of levels to get through before one can be confident that a larger drop is underway. A drop below the 4/16 low at 95.65 and line parallel to the one that extends off of the 3/12 and 4/11 highs would be concrete evidence that something bigger is brewing on the downside. Candlestick traders will notice a bearish engulfing pattern on the weekly. The action is telling. The previous week’s close was the highest in almost exactly 3 years. Price opened above last week’s high and closed below last week’s open.

FOREXTrading Strategy: Looking to short 98.47-99.22.

LEVELS: 95.79 96.70 97.20 98.47 99.22 99.94

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