USDJPY bears look here! This is what my Tflow® strategy says
USDJPY technical picture
- USDJPY is in the 4th year of an uptrend that started in 2012.
- The pair rose to a high that nearly reached 126 but eventually weakened. At the moment it is trading at 121.00.
- It became very clear that there is a resistance at 124.20 which was the high of 2007. Every price action above this level failed to stay.
- We also know that 121.80 i.e. 2014 high is a support. The first time USDJPY weakened and fell below this level in Week 28, price quickly rebounded and closed the week higher, leaving a tail here.
- Since 121.80 is a proven level, it is going to become a resistance instead now that price has fallen below.
- USDJPY printed a bearish expansion on the month-month action in both July and August. This is the clearest sign that the month-month uptrend and higher lows enjoyed in 2014 and early this year is over. Uptrend terminated.
Levels to lean on, levels to overcome
- That 2-month bearish expansion means that any trend following trader should be selling this pair.
- Any strengthening is likely to be retracement move.
- Taking advantage of 121.80, this level is clearly a level to look for price action showing resistance.
- The best signs – look for reaction to 121.80. Best reinforced by a re-test.
- 121.80 (121.84 to be exact) as well as downwards equidistant channel serves as elements that most traders will immediately recognise. Look for confluence between these two.
- Last support appears to be vicinity of 116 – a round number – as well as January low printed at 115.85.
- There is one major element here that most traders likely overlook. That’s the opening price of 2015 at 119.79. Use this as sentiment-reality check.
- Above 2015 open, USDJPY stays positive for the year. Bulls have something to cheer.
- Below 2015 open, the pair turns negative, buyers will look bad.
- This level is going to be a minor support but it’s key contribution is how affects the way many traders feel about this currency pair.
- If price falls below 119.79 again, it’s correction is going to speed up.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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