Since the Federal Reserve increased the interest rate last month the US Dollar has been in a constant decline against the Japanese Yen from the highest level in the last two months at 115.49 to trade now at 110.40 - more than 500 pips in losses.
The USD/JPY currency pair is trading now in a series of corrective waves in a price channel which will lead the prices to make a correction movement to 50% and 61.8% Fibonacci, but we have a key support level at last month’s lowest prices - if the pair breaks it down we can take sell positions to make profits.
The MACD indicator is still giving us a sell signal and the bars are below the 0 value. The RSI hasn't given us the oversold sign yet, which means the pair will lose more pips.
The Next Few Days
From this analysis we can sell the pair now at 110.45 with a small lot size and increase it once the pair breaks the 110.15 level. We should keep our first target at 50% Fibo at 108.85 and the second one at 106.50, which reflects the 61.8% Fibo. This is in case the pair is still trading below 111.70. If it breaks up from 111.70 we can buy it till 113.40.
We have to be careful in the upcoming days regarding hot news like the ISM nonmanufacturing PMI and the FOMC meeting next Wednesday, as well as the Non-Farm and jobs report on Friday.
