USDJPY moved bearish after the CPI news. The news needs to be corrected in order for the market to absorb it fully. The higher time frames has formed lower lows and lower highs which indicates the bearish trend. Therefore once the market retraces back, we will take the short position.

The ascending trendline has been broken out for sells with a massive bearish candle. This candle needs retracement in order to fill our short orders. 

The retracement area is priced at 134.50 which is the golden area and is a little below the resistance level. This confluence is our prime short entry.

The EMA 50 is flat and in a bearish trend. We might not see a retest of the EMA 50 at the confluence level we have drawn.

The RSI is at 36 and this level needs to be neutralized either at the 50 level or at the over bought region where we will see some sort of a divergence in order to confluence and align with other parameters of our short position.

USDJPY shorts from retracement

Aug 10 2022

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