Hi Traders! Today I am sharing with you the USDJPY forecast and technical analysis post. In this pair based on the multi-timeframe analysis method, we are going to look for the evidences on three timeframes that is on the current trading timeframe and two timeframes higher, when we get evidences that support our view on these three timeframes this makes the setup very reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Now, let’s start our analysis from the highest timeframe which will be the daily chart here.

USDJPY D1(Daily) Chart Analysis – Key Support Zone, Alternative Trend Line, Potential Bullish Divergence

On the daily chart, the price which is moving lower has currently reached a key support zone formed by the 161.8%(102.032) Fibonacci expansion level of the first wave and the 100%(103.127) Fibonacci expansion level of the second wave. In addition to this, we have an alternative trend line that has formed and this alternative trendline coincides with the key support zone which makes this area a very strong support zone for us. Also, we have a potential bullish divergence that is forming between the first low that has formed on 8th November 2020 and the second current low that has formed on 6th January 2021 based on the MACD and RSI indicator. We may now move down to one timeframe lower and look for evidences supporting this bullish view.

USDJPY H4(4 Hours) Chart Analysis – Multiple False Breaks And Bullish Divergence

Looking at the H4 chart, we could see that the price has created multiple false breaks. The price first created a false break of the low at 102.869 and then the price created another false break of the low at 102.708, we may consider these as evidence of bullish pressure. In addition to this, the price has created a bullish divergence between the first low that has formed at 102.869 and the second low at 102.601 based on the moving averages of the MACD indicator. We also have a bullish divergence that has formed between the first low that has formed at 102.957 and the second low at 102.601 based on the histogram of the MACD indicator. Also, we have a bullish divergence that has formed between the first low that has formed at 102.708 and the second low at 102.601 based on the CCI indicator as well. We may consider these as other evidences of bullish pressure and the bottom line here is that the H4 chart has evidences supporting the bullish view.

USDJPY H1(1 Hour) Chart Analysis – Bullish Divergence, Parabolic Sar, Downtrend Line

On the H1 chart, we could see that the price has created a bullish divergence between the first low that has formed at 102.957 and the second low at 102.601 based on the moving averages of the MACD indicator, we may consider this as evidence of bullish pressure. In addition to this, based on the Parabolic Sar we could see that the dots are below the price which we may consider as another evidence of bullish pressure. We also have a good downtrend line that has formed, if the price breaks and holds above this dynamic resistance we may then consider it as a validation for the bullish view and may expect the price to continue higher further.

Technical Analysis & Forecast Summary

USDJPY D1(Daily) Chart Analysis 

• Key Support Zone, Alternative Trend Line, Potential Bullish Divergence

USDJPY H4(4 Hours) Chart Analysis 

• Multiple False Breaks And Bullish Divergence

USDJPY H1(1 Hour) Chart Analysis 

• Bullish Divergence, Parabolic Sar, Downtrend Line

Trading Tips

It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.

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Vladimir Ribakov
Certified Financial Technician

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