Hi Traders! We have USDJPY bearish setup forming at the moment. A detailed analysis of this setup is as follows:
USDJPY Weekly Chart:
On the weekly chart the price which is moving lower has created a perfect downtrend line, this trend line is formed from the highs and the price is respecting it so far. Currently the price is moving higher towards this dynamic resistance again, if we didn’t get a valid breakout here then there is a good chance that the price might respect the trend line and move lower. We may now look for more confirmations on lower timeframes.
USDJPY Daily Chart:
On the daily chart we have a potential bearish divergence that is forming at the moment. Once this divergence completes itself we may consider this as an evidence of bearish pressure. We may look for more confirmations on lower timeframes to join the bears.
USDJPY H4 Chart:
On the H4 chart the price is moving inside a bullish channel. This channel is formed by the highs and lows reaching parallel support and resistance zones. The price is respecting these two zones so far. Currently the bullish momentum holds and the price is approaching good reversal levels. So basically the 111 zone is where we may start looking for sells after reversal confirmations.
Invalidation: If the price breaks and holds above the weekly downtrend line then this setup is invalidated (false breaks are acceptable).
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