Update: Price broke above with momentum. The sell setups are now invalidated.
Hi Traders! USDJPY bearish channel provides sell opportunity for us. A detailed analysis of this sell setup is as follows:
USDJPY Daily Chart:
On the daily chart the price is moving inside a bearish channel. This channel is formed by the highs and lows reaching parallel resistance and support zones. The price is respecting these two zones so far. Currently the price has reached the top of this channel, we have a confluence zone around 111.50 which acts as a strong resistance for us. Once we reach 111.50 we may expect a potential bearish divergence to form, which we may consider as an evidence of bearish pressure. We may then start looking for sells with more bearish evidences.
USDJPY H4 Chart:
On the H4 chart we have a double wave up with potential bearish divergence forming. We also have two uptrend lines that has formed. If you want to be aggressive you can then go short with the breakout of the first uptrend line. If you want to be more conservative then wait for the price to break below the second uptrend line and then you may start looking for sells.
Note: It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
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