Will the Downtrend Resume for USD/JPY? - Forex News by FX Leaders
The retrace higher is complete, with stochastic overbought

Will the Downtrend Resume for USD/JPY?

Posted Thursday, November 12, 2020 by
Skerdian Meta • 1 min read

USD/JPY used to be on a bullish trend in Q4 of last year, as the US and China were heading towards a trade deal, which improved the sentiment in forex and sent safe havens lower. Moving averages were providing support, but after the crash and the big reversal in March on coronavirus, the trend turned bearish.

Moving averages turned into support and they have been pushing USD/JPY lower since then. The 100 SMA (green) was doing that job initially, then the 50 SMA (yellow) took over on the daily chart. Last week we saw another bearish move lower as the USD declined on election week, pushing USD/JPY to 103.20.

But, the sentiment improved on Monday after news from Pfizer on the coronavirus vaccine, which is still unclear if it works. But it was enough to improve the sentiment in financial markets, sending safe havens lower and USD/JPY higher. But, buyers ran into the 50 SMA and stochastic is now overbought. The previous 2 candlesticks also point to a bearish reversal, so this might be a good time to go short on USD/JPY.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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