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USD/JPY: Is the Bear going to take control?

EagleFX

USD/JPY produced a bearish engulfing candle on the daily chart yesterday. The price made a breakout at yesterday’s lowest low. The pair is trading below the breakout level as of writing. The sellers may keep their eyes on the pair to go short and drive the price towards the South further. Let us now have a look at the three major charts.

Chart 1 USD/JPY Daily Chart


The chart shows that the price had a rejection at 109.800 and produced a bearish engulfing candle. Thus, the sellers may keep their eyes on the pair to go short in the pair. The chart shows that the price is trading below yesterday’s lowest low. It usually brings more sellers to look for short opportunities. The price may find its next support at 106.000. On the other hand, if the price goes back within the breakout level, it may get choppy in the daily chart.

Chart 2 USD/JPY H4 Chart


The H4 chart shows that the price had a rejection at the level of 108.500 and produced a bearish engulfing candle closing well below consolidation support. Such price action may bring the sellers to take short entries in the pair. The H4 chart shows that the price may find its next support around 107.150. On the contrary, if the price gets bullish and makes a breakout at the level of resistance, it may not get that bullish. The level of 108.450 may work as a level of resistance in that case.

Chart 1 USD/JPY H1 Chart


The chart shows that the price made a strong bearish move on the chart yesterday. It had a bounce at the level of 108.250 and made a bullish correction. Upon producing bearish candle, it made a breakout at the level of 108.250 and traded below the level for several candles. The breakout level produced a doji followed by a bearish engulfing candle. This may have attracted the sellers to go short in the pair. The price may head towards the South with good bearish momentum and find its next support around 107.550. If today’s lowest low works as a level of support and pushes the price towards the North, a breakout at 108.250 may create bullish momentum. The price may find its next resistance at 108.550.

Considering these three charts, it seems that the pair may make a strong bearish move. If the candle closes as a bearish candle having a tiny lower shadow, the pair may remain bearish for some days.

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