Will the Downtrend Resume in USD/JPY Now That the Retrace Higher is Complete?
Skerdian Meta • 1 min read
A short while ago we decided to open a forex signal in USD/JPY. This pair turned really bearish last month on growing concerns about the escalating trade conflict. Safe havens benefit as a last resort to run to when the sentiment turns negative in financial markets and, as a result, Gold and the JPY have turned pretty bullish.
This week, the price has retraced higher, although we can see that the pullback has been pretty weak. We have seen three retraces higher worth 40-50 pips, which have ended around the 108.40 level this week, while this last pullback has stretched a bit higher to 108.60.
This is the biggest pullback since the trend turned bearish last month, so it is a good opportunity to go short on this pair. The stochastic indicator is overbought on the H4 time-frame chart now and the 50 SMA (yellow) is providing resistance for this pair, even though the price didn’t touch it. Hence our sell signal in USD/JPY.