Waiting for a Retrace, as the Decline Continues for the USD/JPY in the New Year

USD/JPY continues the downtrend in 2021, with MAs pushing it lower

Skerdian Meta•Monday, January 4, 2021•1 min read

The USD/JPY was bearish for most of 2020, with the sentiment being negative throughout last year, which kept safe havens in demand. On the other hand, the USD was also quite bearish last year, declining against all major currencies, hence the downtrend in this forex pair.

Moving averages were doing a good job in providing resistance for the USD/JPY, particularly on lower time-frame charts. We see that the 200 SMA (purple) has been providing resistance during retraces higher, ending the pullbacks and reversing the price lower.

The lows have been getting lower, which also shows that the pressure remains to the downside. The USD/JPY closed 2020 on a bearish footing as a result, and today it broke below 103, as the bearish trend resumed again, suggesting that the bearish momentum continues in this pair. The USD is falling against most major currencies, so the decline is coming from the USD once again. We will wait for a retrace higher in this pair and go short once the price reaches the 50 SMA (yellow) or the 100 SMA (green) on the H4 chart.

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ABOUT THE AUTHOR See More

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.