The USD/JPY trend changed, as we highlighted in one of our forex updates today. Sellers made a few attempts at breaking the 105 level but after failing plenty, it seems they have given up.
An opportunity is rising here thus we shifted our bias to bullish now and looking to go long on this forex pair. The US Dollar lost 60 PIPs after the US inflation report failed to impress the market, despite presenting exactly as expected. As a result, the USD/JPY fell 60 PIPs.
This decline offers a good opportunity to try and get in on the long side of the USD/JPY. This forex pair tumbled lower and reached the 50 SMA (yellow). I mentioned this moving average earlier today, which provided resistance earlier and now turning into support.
USD/JPY is setting itself up for a buy signal
The moving average stands at 106.70. I would have liked for this pair to retrace to 106.50, before going in, which would increase the risk/reward ratio.
The stochastic indicator would be oversold by then and we don't know where the market goes. We will possibly open a buy forex signal in the USD/JYP sometime soon. I will follow this pair a tad longer to see if we can get a better lower priced entry.