- Market structure: Market structure on USDJPY h4 had been bullish, but on the daily, it’s still bearish. Until the market breaks the resistance at 110.55, the market sentiment on the daily remains bearish. Right now, on the h4, market is at the price level of 110.15. At this level, we have a strong resistance which is being tested the first time. This resistance is also a supply zone. At this level, we will look for shorts for intraday.

- Trendline: There is an ascending trendline on the pair which has been broken. With the current H4 candle close, we will have validation on the trendline breakout sell. After the breakout, we will wait for the market to retest the resistance zone once more. This trendline breakout also aligns with the resistance level and market structure. There is also a descending trendline testing the price at the resistance.

- Retracement: The golden retracement level of 75-78.6% remains in confluence with the resistance area. This area being in confluence with the supply zone makes the trade possibility high for shorts.

- EMA's: Both EMA’s are below the current market prices. It is to be noted that the death cross on the EMA is still bearish. Although market broke both the EMA’s upwards, the retest on both of them is due. We will wait for the EMA 200 retest as the potential profit target. But the fact remains that EMA 200 retest might not happen in confluence with the support area.

- RSI/CCI: Both RSI and CCI began dropping after tapping the over-bought region of the oscillators. RSI tapped 70 and CCI tapped 200 before the decline begun. Now, we will wait for another double top of the oscillators to align with our trade setup before taking a short position.

The USDJPY is a high probability setup due to the setup falling on the supply zone. We have 3 confirmations on this setup. Once the price breaks the resistance to the upside, we have to manage risk and liquidate our trade keeping the losses small.

USDJPY intraday short setup

Aug 09 2021