With the EURUSD possibly resuming its downtrend I'm looking for other pairs to capitalize on the return of dollar strength. The USDJPY has a strong impulsive rise on the hourly chart from 120.42, but really struggled for new highs once it reached 123.73. The new highs from that level were hard fought choppy grinds with a bearishly divergent RSI. I believe the current downward consolidation is an (a) and (b) wave, which sets up nicely with the price action I just described. That type of price action usually results in a sharp retracement. That "sharp retracement" will fit nicely with a wave (c), and therefore ending wave ((ii)).
For now, I'm looking for a move down to the 50% Fibonacci retracement level at 120.45. Price behavior around that area will give us a clue as to how it will progress from there. Over the next several hours, price should continue to close at or beneath the moving averages I have on my chart.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.