USD/ JPY has put up an epic fight in the last month since Donald Trump won the US presidential elections. You can´t ignore a 14-15 cent surge.
That´s impressive, but the most important thing in this forex pair is the fact that this 15 cent surge comes after the price has been following a steep downtrend the entire year, which means the market sentiment has now changed. Yesterday´s jump from around 113 after the ECB meeting is another sign that the forex market is long on this forex pair.
Yet, the big resistance level at 115 hasn´t been breached. The price has failed several times up there and we are approaching that level again. We know that the more the price fails at a level, the stronger that support/resistance level becomes and as a matter of fact, some forex traders are calling for a top here.
The USD/JPY technical analysis screams sell
I don´t know if this will be the top since the sentiment has shifted to the upside now, as we mentioned above, but a decent retrace lower is quite possible if USD/JPY buyers fail to break the 115 level gain. As we can see from the weekly forex chart, the 100 simple moving average coincides with this level so that´s another technical indicator adding strength to it.
Now we got a hot potato in our hands; should we trust the technical analysis and open a long term sell forex signal or should we follow the price action which is finding the downside very difficult? Take your pick and choose quickly ,because you can´t hold a hot potato for too long. One side of the market will give up sooner or later, whether it is the sellers or the buyers.
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