USDJPY tapped a solid psychological number of 112. When it tapped this level before, it made a bearish impulse leg and then, tapped again at the resistance for a double top. At this level, we will be looking for shorts till the next support. We will wait for a bearish engulfing or pinbar. Once market starts forming LH and LL, it will confirm the bearish trend.

USDJPY is forming a bearish wedge pattern with two trendlines copulating it. The resistance trendline will also be reflecting a bearish divergence trendline on the prices and candles.

The golden area of retracement of 75-78.6% has been voided by the market. Although, the retracement was merely below the resistance level, we cannot fully conclude the retracement being breached until unless, it has fully validated the breakout. Just above the retracement, we have a resistance level which has halted the bullish move. The fact remains that this resistance might act as a catalyst to drive the market down and ultimately, make it close below the retracemenet levels mentioned.

Both the EMA’s are currently in a bullish trend, with a bullish death cross. The EMA retest will be considered as our potential profit targets for the shorts. Other than this, we do not see any viable factor to confluence with the EMA, at this point in time.

RSI and CCI, both are in an over-bought area. The divergence has been formed on the prices, but awaits being formed with the oscillators. We will wait for the market to form a bearish divergence to have a higher probability for our short position.

Today is NFP. Apparently, as per the date, the USD strength is highlighted. Based on the technical overview, we do see USDJPY as a potential short from this resistance level. The strength of the resistance level is determined with higher time frames being in confluence with each other. If market breaks this resistance, we will exit the market as soon as possible, taking in as little loss as possible.

USDJPY looks good for a short

Oct 08 2021

Stop Loss -0.33%

Holding time 5hr

111.827

Entry price

112.192

Stop loss price

1