USDJPY Might Correct Lower In short Term

The US dollar jumped sharply against most major currencies, including the Japanese yen. The FOMC meeting minutes acted as a catalyst for the USDJPY pair, as it traded close to the 104.00 level. It is currently consolidating, and I think there is a strong chance of short-term correction towards the 103.40 level. So, selling Intraday looks like a good option moving ahead.

There is over twenty candles ride on the hourly chart, and the RSI is also coming off from the extreme levels. We can try a small risk sell position around the current or a bit higher levels around the 103.85-90 area. Remember, this trade will have a very small stop i.e. above the 104.00 level.

Initial target should be around the 103.40 level, and final target could be around the 103.25 level. Stop should be above the 104.00 level.

Reviewing yesterday’s events and trades
Yesterday, it was an eventful day, as the FOMC meeting minutes were lined up. The outcome was in favor of the US dollar, as the minutes revealed that some fed members think that the rate hike is possible sooner than expected. This boosted the US dollar and it gained a lot of bids against the Euro and the British pound. The EURUSD broke the 1.3300 support area and traded towards the 1.3250 level as we were expecting. The GBPUSD pair also moved lower and traded close to the 1.6560 level. Other pairs such as AUDUSD and NZDUSD are also trading lower.

Fundamental Outlook for the day
Today, the US initial jobless claims data, manufacturing PMI, existing home sales data and the Philadelphia fed manufacturing survey index will be released later during the NY session. So, there can be a lot of action in the coming session. We need to see how the US dollar behaves, as it is reaching important levels against most other major currencies. There is a chance that the pairs might correct a bit higher from the current levels before the mentioned economic releases.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPCHF, AUDCAD, AUDUSD, NZDUSD, GBPUSD and EURGBP.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!