A few minutes ago, we opened a buy forex signal in USD/JPY. As we mentioned in one of our updates yesterday, this forex pair dived to around 112.90, among broad USD selling, since the FED meeting and rate hike decision on Wednesday.
The Buck has been on the back foot since then, with most of the major currencies making considerable gains against the Dollar.
That said, the Yen has shown some weakness in the last 24 hours or so. While all forex majors have remained unchanged at top levels against the Buck for the last several trading sessions, USD/JPY has made some considerable retraces yesterday and today as well.
Now, we have slipped about 20 pips lower from the top this morning, as you can see on the H1 forex chart and the stochastic indicator is almost oversold.
I think that the downtrend in this forex pair is over because we are seeing considerable jumps every time the price gets to 113 or lower, which means that the sellers are not feeling comfortable when the price gets close to 113. So, they reverse their positions.
That´s how I try to figure out price action, by the way. It´s not the Holy Grail of forex but it helps understand the market and the buying/selling forces, and their mood around certain levels.
So, let´s hope the buyers reappear again. It´d best if we had stayed above the 20 SMA in grey, but until the price moves considerably below it, the break is not confirmed.