The trend in USD/JPY seems to have changed, as we highlighted in one of our forex updates today. The sellers had a few attempts at breaking the 105 level, but after failing, it seems as they might have given up.

So, we have shifted our bias to bullish now. We are looking to get long on this forex pair and it seems like an opportunity is arising. The US Dollar lost 60 pips after the US inflation report failed to impress the market, despite coming out exactly as expected. As a result, USD/JPY dived 60 pips.

Although, this decline looks like a good opportunity to try and get in on the long side of USD/JPY. This forex pair tumbled lower and reached the 50 SMA (yellow). I highlighted this moving average earlier today. It has provided resistance before and now it seems as it has turned into support.

USD/JPY is setting itself up for a buy signal

That moving average stands at 106.70. Although I would have liked this pair to retrace to 106.50 at least, before going in. That would increase the risk/reward ratio.

The stochastic indicator would be oversold by then. But, we can’t decide where the market goes. So, we might open a buy forex signal in USD/JYP anytime now. Although, I will follow this pair a bit longer to see if we can get a better entry price lower.