USD/JPY goes south on weaker dollar
USD/JPY has stopped at 114.553 which is the top line of the long-term downtrend and is reversing back inside of the trend. Recently it played out a correction which seems is coming to an end. Even though the panic from yesterday and the stronger USD, the Buck slipped and we saw lower numbers for the inflation data from today. CPI came at 0.1% from 0.2% forecast and previous.
First scenario: USD continues to slide and the price touches the lower line in the wedge (currently it is struggling to press the 50 daily moving average) and breaches. Makes a test and succeeds in convincing the Bears that Bulls are retreating for good. With this, we can start selling towards the 200 DEMA (blue curve) and if we to be sure that JPY will stay king, we need a successful breach there as well.
Second scenario: Everyone pumps the USD on rate hike fears and worsening of the world economy and the price makes another attack on 114.553 and successfully breaches. With that, we can enter the movement with longs and catch the bigger reversal.