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The Trend of the Day - USD/JPY

The Trend of the Day - USD/JPY

Gregory McLeod, Currency Analyst

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.

usdjpy 12.09.2009

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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