Is the Retrace Over at the 20 Daily SMA for USD/JPY?
The investor sentiment has been quite negative since 2018. The sentiment turned slightly sour in financial markets back then due to the trade war between US and China, while it deteriorated further in 2020 due to the coronavirus. As a result, the safe havens have been on a bullish trend during this time.
USD/JPY crashed down from 112 to 101 in the initial coronavirus panic in early March, but reversed back up just as quickly in the second half of that month. Although, the decline resumed again and this p[air has been trading on a bearish trend since then.
Moving averages have been doing a great job during this time, stopping the retraces higher on the daily chart and reversing the price back down again. The 50 SMA (yellow) has been the ultimate resistance, while the 20 SMA (grey) has helped when the pace of the decline was stronger. In the last two days, we have seen a retrace higher on the daily chart and today I decided to open a sell forex signal at the 20 SMA. Now, let’s hope that the retrace ends at the 20 MA and the bearish trend resumes again.