Beginning mid-July, the USD/JPY began its downward trajectory, dropping to 130.39, a strong support level, after creating a high of 139.38. After which, some choppy price action in the first half of August has heavily disguised trader sentiment and a clear direction in the pair.
Now the choppiness may be clearing. The USD/JPY recovered some ground last week, gaining by almost 2.7% in a non-ambiguous push to the upside. The strong bullish momentum the pair experienced meant it was able to break above the 135.000 resistance and continued to rally to 136.90.
The Fisher Transform Indicator signaled a solid bullish move as the fisher line crosses above the trigger line and breaks above the zero line. With this strong indication, if the strong momentum persists, the price targets for traders might be previous peaks, including 137.40, 138.700, and last month's high of 130.40.
A more optimistic trader might even be targeting a new high if the US dollar remains strong. However, a break above 136.900 is still needed before the price can target further upside. Failing to do so, however, the price may fall to the resistance level and possibly retest the 135.000 area.
GBP/JPY, on the other hand, has been currently moving to the downside with some upside impulses.
The Auto Fib Retracement Indicator shows that the price has rejected at the 50% level at around 163.60. The lower lows that are highlighted should also be noted, indicating that the current price action is currently in a downtrend, and a possibility for a new lower low may be seen this week if the price breaks below the 160.500 support area.
The price, however, needs to break the 23.6% level first before continuing the move to the downside and filling the wick from the second of August, which has a current low of 159.44, and sits at the 0% pivot point of the Auto Fib Retracement Indicator.