The USD/JPY has been trading on a bearish trend for the last two months. It reached the big support level at 105.50 early last week and jumped from there.

Last night, The USD/JPY opened with a large gap but reversed immediately and ended up about 80 PIPs lower this morning. The price action, however, shows us that sellers remain in control with this pair.

The 50 SMA providing resistance today

This forex pair is retracing higher again. It climbed about 50 PIPs in the last few hours and the stochastic indicator reached the overbought area on the H1 chart. The retrace up is now complete.

The 50 SMA (yellow) is providing support and the previous hourly candlestick closed as a Doji, the reversing signal. We decided to go short on this pair and issue a sell forex signal.