The Trend of the Day - USD/JPY
look to short this pair on any rally up to the 89.00 area. The recent USD/JPY rally was soundly rejected at the 90.77 high back on December 3rd. Currently price is hovering in a tight 50 pip range between 87.50 and 88.00.
The USD/JPY is still trading below its 200 SMA on a daily chart which is a bearish sign. However, shorter time frame oscillators are showing that we could get a small USD/JPY rally before dropping to a target area in the 86.00 area.
The FXCM Speculative Sentiment Index reveals that there are nearly three traders long for every trader short the USD/JPY. SSI is a contrarian indicator that tells us that the USD/JPY should move lower.
Use an oscillator like stochastics or RSI on a 4 hour chart to pinpoint a sell entry. Wait for the indicator to cross above its upper reference line and then cross below. Confirm this with a break of the rising 4-hour chart trend line (H4) on market scope.
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