Shorting USD/JPY at the 50 SMA
Skerdian Meta • 1 min read
USD/PY has been following a consistent downtrend since topping at 11350s about three weeks ago. Last Thursday we saw a 120 pip jump in this pair after Trump’s comments that a strong US Dollar is good for the country.
The jump came when this forex pair was trading at 108.50. At first, I thought that this was the reverse we were waiting for. The area from 108 lows up to 108.70-80 has been providing support for this pair throughout last year.
A jump from this area should have been the beginning of the reverse, right? Yet, this pair fell back down to 108.20s, indicating that the reverse hasn’t begun just yet.
The 50 SMA is providing resistance this morning
Nevertheless, we are seeing another climb higher and I thought that the chart setup favored a sell forex signal. The trend is massively bearish, with the USD unable to gain momentum anywhere across the board. So, we are in the right direction, going with the flow.
The stochastic indicator is not overbought yet, but it is getting there. This timeframe chart will be overbought soon, probably when this hourly candlestick closes.
Another bearish signal is the 50 SMA (yellow). This moving average hasn’t been the main component in keeping the downtrend going. But, it has provided resistance at the beginning of the downtrend about three weeks ago and it looks like it is doing the same now. For these reasons, we opened this sell USD/JPY signal.