Hi Traders! USDJPY short term forecast and technical analysis is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more 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! Let’s start our analysis from the highest timeframe which will be the daily chart here.
USDJPY D1(Daily) Chart Analysis – Bearish Divergence, Parabolic Sar
On the daily chart, we had a strong bullish rally, currently it looks like this bullish rally has completed itself and a correction is happening. We could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 114.698 and the second high that has formed at 116.337 based on the MACD indicator,which we may consider as evidence of bearish pressure. Also, based on the Parabolic Sar we could see that the dots are above the price which we may consider as another evidence of bearish pressure. In addition to this, currently there are no signs opposing this bearish view. So based on all this, I expect possible short term corrections to happen here. We may now move down to lower timeframe and look for evidences supporting this short term bearish view.
USDJPY H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, Uptrend Line Breakout, Bearish Trend Pattern, ADX Indicator
On the H4 chart, the price which was moving higher reached a key resistance zone formed by the 100%(116.390) Fibonacci expansion level of the first wave, respected it and bounced lower from this zone. In addition to this, we had a bearish divergence that has formed between the first high that has formed at 115.683 and the second high that has formed at 116.337 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, the price which was moving lower has broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. In addition to this, we could see that the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as another evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. Until this key resistance zone (marked in blue) shown in the image below holds my short term view remains bearish here and I expect the price to continue lower further after pullbacks.
Technical Analysis & Forecast Summary
USDJPY D1(Daily) Chart Analysis
- Bearish Divergence, Parabolic Sar
USDJPY H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Uptrend Line Breakout, Bearish Trend Pattern, ADX Indicator
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 sell 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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Happy Trading!
Arvinth Akash
Traders Academy Club Team
