The price of USDJPY has broken into new lows on the daily timeframe, highlighting a potential reversal in the trend. If the price forms a low ranging candle or a bearish rejection candle, we can start to look for short opportunities.
We’re going to take a look at USD/JPY as the price is approaching the previous structure lows.
In the weekly timeframe, the price closed as a significant bearish candlestick then rejected the previous highs back in March. We also had nice low ranging weekly candlesticks closing back within each other’s range. Finally, there was a good bearish close, suggesting that we could see a continuation of that move this week.
We can take the high and low to the 50% of last week’s price action. We could look at it to see if the price rejects around the 50%.
The price of USD/JPY formed a strong bearish close on the weekly timeframe after rejecting the recent weekly swing highs. The strong bearish close could suggest further downside to come and the price is currently working around the 50% retracement of the weekly price action.
In the four-hour timeframe, we could look for one opportunity to take this market short through a potential move down.
The price is currently at 50% and at the previous structure area at 110.40. Now, we could look for a change in trend around that point. If we see the market form a double top pattern, we could then look for a rejection and a continuation back down to last week’s low and bearish move.
If the price forms a double top pattern or a change of trend pattern we can look for a reversal and a trend continuation on the daily timeframe.
Alternatively, we can keep an eye on the daily timeframe and wait until the price comes up. It is now retesting the previous structure lows at the 110.40 area. I’d like to see a low ranging or a bearish candlestick to suggest that this downward move will continue after breaking through the structure low.
The daily timeframe has seen the price push back to the previous lows. We can look for a low ranging candle or a bearish candle here for a continuation move.
So, keep an eye on USD/JPY. We’re looking for some bearish price action in this market. You can either look for a double top on a lower timeframe like the four-hour timeframe or wait and see how the daily bearish price action forms.
If you get a nice bearish close or a low ranging candlestick, it could be a sign that the price or the trend will continue and move down into the previous structure lows.
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