Hi Traders! Today I am sharing with you the USDJPY technical analysis and forecast post. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. 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.
You can watch the video explanation of this idea here
USDJPY D1(Daily) Chart Analysis – Bullish Rally, Bearish Divergence, Stochastic Oscillator, Strong Support Zone
On the daily chart we had a bullish rally which ended with a bearish divergence based on the MACD indicator. Currently it looks like a correction is happening, after the first move down it looks like a pullback is happening now. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as evidence of bearish pressure. In addition to this, currently there are no signs opposing this bearish view. So based on all this my view here is bearish and I expect the price to move lower towards the strong support zone shown in the image below (marked in red) around the 107 area.
USDJPY H4(4 Hours) Chart Analysis – Two Possible Scenarios
In my point of view, on the H4 chart there are two possible scenarios, which are as follows:
Scenario 1
The price might move higher from the current zone and reach the key resistance zone formed by the 100%(110.599) Fibonacci expansion level of the first wave, respect it and move lower from this zone. Alternatively if the price moves higher further, breaks and holds above the invalidation level (marked in red line) then this bearish view will be invalidated.
Scenario 2
Alternatively if the price moves lower and if we get a valid breakout below the most recent uptrend line and the strong support zone, we may then consider it as a validation for the bearish view and then we may expect the price to continue lower further.
So based on these two possible scenarios my view here is bearish and I expect the price to move lower further until the invalidation level holds.
Technical Analysis & Forecast Summary
USDJPY D1(Daily) Chart Analysis
- Bullish Rally, Bearish Divergence, Stochastic Oscillator, Strong Support Zone
USDJPY H4(4 Hours) Chart Analysis
- Two Possible Scenarios
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.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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To your success,
Vladimir Ribakov
Certified Financial Technician
