USD/JPY Bounces From Brexit Lows

Talking Points

• The USD/JPY Advances for the Second Session Post Brexit
• USD/JPY Daily Highs Reside at 102.80
• Bearish Reversals Signaled Under 102.39

The USD/JPY has risen as much as 125 pips this morning, and is currently trading under the daily high at 102.80. Much of today’s USD/JPY advance has been predicated on international markets rebounding from last weeks “Brexit” vote. So far, the pair has only recovered a portion of its Friday’s decline, but has rallied for the last two trading sessions. This leaves traders to gauge short-term momentum to determine if the markets downtrend is set to continue, or if a broader retracement is in order.

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USD/JPY Daily Chart

(Created using Marketscope 2.0)

Displayed in the 3-minute chart below, the USD/JPY can be seen declining off the daily high at 102.870. Using the GSI indicator, we can see that new short-term momentum has been highlighted with a series of declining 3-minute bars. After reviewing 49,266,445 pricing points, GSI has indicated that price action has declined a minimum of eight pips in 39% of the 130 matching historical events. Prices have alternatively advanced a minimum of nine pips in 45% of the matching events. Traders looking for a resumption of today’s uptrend should focus on the first bullish distribution found at 102.80. If the USD/JPY trades through this value, the pair would be breaking out towards a new daily high, and signal a resumption of bullish momentum.

Traders watching for a bearish reversal, back in the direction of the daily trend, should continue to monitor the final bearish distribution at 102.39. Prices declined 32 pips in only 5% of the 130 matching historical events. A move through this value would open the pair up to test other values of support. This includes the previous swing low at 102.08, as well as the daily low at 101.55.

USD/JPY 3 Minute GSI Chart

(Created using Grid Sight Index)

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What is GSI?

Grid Sight Index is a powerful big data indicator that can help you determine whether short-term trends will continue or reverse. GSI takes a snapshot of current price action and uses that to find similar events by studying millions of historical data points. Then it studies those events to show you how often the trend continued or reversed in the past.

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