The USD/JPY Trading Lower for Fifth Day

Talking Points

• The USD/JPY is trading lower for the fifth straight day
• Today’s price breakout began under 117.94
• Bullish reversals potentially begin over 118.19

USDJPY 30 Minute Chart

(Created using Marketscope 2.0 Charts)

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The USD/JPY is now working on its fifth straight daily decline, and has already dropped as much as 314 pips on the week. Because of this move, by the US session open, the USD/JPY has already broken out below today’s S4 pivot found at 117.94. From this point, prices have declined an additional 62 pips to the standing daily low at 117.32. From this point, as depicted in the chart above, prices have now retraced back and are currently trading near the S4 pivot. If price action remains under resistance, it can allow bearish momentum traders fresh opportunities to sell the market.

In the event of a price reversal that rallies the US Dollar against the Yen, traders may begin, looking for an end to the current breakout conditions above the S3 pivot found at 118.19. While a move to this point would not be considered a trend reversal, a move back inside of today’s pivot range would open up the USD/JPY to begin challenging values of resistance. It should be noted that today’s trading range measures 50 pips, and that the R3 resistance pivot is found at a price of 118.70.

SSI (Speculative Sentiment Index) for the USD/JPY has also reached an extreme, and is currently reading at +2.173. When used as a contrarian Index, this reading can help validate the current downtrend in the market. In the event that the USD/JPY begins to attempt a reversal, traders should also continue to monitor this value. Any decrease in sentiment from its present extreme may signal a change in the present market conditions.

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