After going through a difficult price action on H4, USDJPY tends to be in a bearish cycle. At the resistance level of 115.30, there seems to be a strong resistance along with the order block. This order block will provide liquidity for the market to move down. Our profit target will be at the support level. In this situation, market is forming LH's and LL's.

With the trendlines, there is a wedge pattern being formed. The resistance trendline has been tapped once and is rejected on the second tap. On the other hand, the ascending trendline is below the current price action. It needs to break the trendline to confirm the breakout sells. Once the breakout sells is confirmed, the bearish pressure will be sharp.

The golden retracement level of 75-78.6% aligns with the resistance level. This resistance level will be strong in order to push down.

The EMA's have a bullish death cross. This death cross needs to be broken by either of the EMA 50 or EMA 200 breakout for sell. There is a chance market may reject either of the EMA and started pushing up. 

Both the oscillators are in a bullish region right now. The resistance level needs to be an over bought situation for the oscillators. At this over bought situation, there needs to a bearish divergence. This bearish divergence needs to be occurring at the resistance level in order to align with other technical factors. 

This setup is risky. At the resistance level, we have 3 technical factors for shorts where as, 2 factors for going long. Therefore, when market breaks the resistance level, we will take the stops and look for another opportunity,

USDJPY might go on a downward whirl

Feb 06 2022

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