Early price action for trading week has the U.S. dollar slightly higher around the 111.50 level against the yen. In Asia, Japanese data showed exports climbed again and the trade surplus against the US narrowed. Japan’s exports rose in April by 7.5%, a fifth consecutive gain but a slight miss from the analysts’ consensus of 8.0%. The rise was supported by shipments of semiconductor and steel.
The USD/JPY daily chart shows that price formed a bullish Gartley Pattern on April 17th. Point C was confirmed with the 50% Fibonacci retracement of the A to B leg, while Point D was targeted with both the 61.8% Fibonacci retracement of the X to A leg and the 200% Fibonacci expansion level of the B to C move. The rally tentatively took out the 100-day SMA, but topped out on May 10th at the 114.36 level. Last week’s noted 2% slide has price facing key support from the 200-day SMA. If we see one last push lower, price may find support from the 107.50-108.00 region. Key resistance remains the 100-day SMA, which currently trades at the 112.69 level. If the bullish momentum returns, major resistance lies at the 115 handle.
The trade: Sell USD/JPY 109.80, with a stop loss at 108.80 and take profit at 113.80. The Risk/Reward Ratio is 1:3