Here is a technical analysis of a currency pair dancing on the forex dance floor. What’s a forex dance floor? It’s a metaphor we use at Invest Diva which refers to the trading chart. We like to think that the currency pairs are making history by their dancing moves on the dance floor.
The pick of the day is USD/JPY, which was on an uptrend ton the daily chart, till it hit a resistance level at 105.382 on December 30, 2013. Since then, it once again tried piercing through the resistance level on 10th of January, but failed, and has been trying to sell off repeatedly ever since, including a bearish engulfing that happened on Wednesday.
Throwing a Bollinger Band indicator on the dance floor, as you can see the pair is now scratching the lower band. That is normally an indication that the pair is being oversold, and we could expect the pair to return to the middle of the band. But, will it be brave enough to test, or even worse, break the resistance level? We shall wait and see.
Stay tuned for more technical updates and don’t forget to listen to the fundamental news and market sentiment as well, before you make a final trading decision!