Yesterday we posted an update about USD/JPY. This forex pair has been trading in a continuous downtrend and every retrace was getting lower and lower, as you can see on the H1 forex chart below.

Yesterday in the morning, this pair jumped above the 50 SMA for a moment, only to reverse and end up about 100 pips lower in the afternoon, so, rightfully, we came to the conclusion that the 110 level was going to go soon.

Well, that didn´t happen and we are back above 111 as I speak. Besides that, this 100 pip move higher has been pretty straightforward, with dips getting bought almost immediately.

The reverse on the H1 chart looks pretty swift

So, we can say that the sellers have given up on claiming the 110 barrier, at least for the time being. The daily chart agrees with this idea, since stochastic reached the oversold area and yesterday´s candlestick closed as a doji, which is a reversing signal.

Although, the price right now is sitting just below the 50, 100 and 200 SMAs on the same timeframe chart, so if the reverse is to happen, we should break above these moving averages soon.

Besides that, the H4 chart is sort of overbought and the 50 SMA (yellow) is hanging only a few pips above here, which is likely to provide some sort of resistance, if not reverse the price back down again.

The H4 chart is oversold though

So, it looks like the sellers and the buyers can´t make their mind about the 110 level. The charts paint contradicting pictures as well, so we will try planning this pair with short term signals. We are thinking of opening a sell forex signal about 10 pips higher since it is a half decent resistance area, but we will check price action before deciding, so hang around if you feel like trading USD/JPY.