USDJPY Correction Over? (Oct 24, 2014)

This also coincides with the 200 SMA and the 61.8% Fibonacci retracement on the latest swing high and low of the 4-hour chart.

Stochastic is suggesting a pickup in selling pressure, as the indicator has reached the overbought zone. MACD is suggesting that there may be a bit of buying pressure left. 

A selloff could take the pair back down to its previous lows at the 105.50 minor psychological mark. The 100 SMA has just crossed below the 200 SMA, which suggests that a downtrend is in the cards.

On the other hand, an upside break past 108.00 could be a sign that more gains are in the cards, enough to take USDJPY to its previous highs at 110.00. Event risks for this trade setup include the US new home sales release and potential profit taking at the end of this trading week. 

By Kate Curtis from Trader's Way