This week earlier, YEN was massively bullish which propelled the USDJPY to shrink in no time. This was due to the fundamental aspect. Overall, USDJPY is bearish and we have a trade plan for shorts.

- Market structure: The structure on USDJPY is still bearish unless it breaks the 110.60 levels to the upside. Right now, what we see on the pair is that market is resting at a major resistance level at 110.35. Just above this, we have another resistance of daily at 110.55.

We will look for further confirmations at this resistance to go short.

- Trendline: Descending trendline was pierced just today. After the breakout buys, usually market retraces to further pull up. In this scenario, we don’t have a bullish structure yet which would verify the trendline breakout buys. In order to take buys based on the trendline breakout buy, we will wait for market to retrace and then wait for a trendline breakout buy on h1. Right now, there is no such formation on the charts. Hence, we continue looking for shorts based on the structure.

- Retracement: The resistance level of 110.35 totally overlaps with the retracement level of 75-78.6%. Also, this retracement level falls on the daily chart as well making it a strong indication to take shorts.

- EMA's: EMA’s had been diverging continuously. There is no clear direction on the EMA’s yet. The death cross to the downside was triggered. Although, the EMA 200 was breached just now, there are still no confirmations for buy, as we need to validate the EMA breakout after candles opening and closing above the EMA.

- RSI/CCI: The oscillators currently have no direction as per say. RSI is at 59 and CCI at 49. Both need to fall into the bearish region below 50 and 0 respectively. No divergences on the over-bought region were observed.

USDJPY is standing at a strong crucial region, in confluence with resistance and retracement level. Although there are no confirmations on EMA, trendline or oscillators, we can still risk 2-3% at the given levels of USDJPY.

Where are we on USDJPY?

Jul 21 2021

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