Forex Strategy: USD/JPY Shooting Star Near 104.00 Leaves Bulls In Suspense
- USD/JPY Technical Strategy: Longs preferred
- Bearish reversal signal near 104.00 awaits confirmation
- Dip back to 103.50 to offer new buying opportunities
USD/JPY is facing a make-or-break moment in the hours ahead as the 104.00 handle continues to keep traders in suspense. A Shooting Star formation on the daily offers a potential warning signal of a dip. However, it has failed to receive confirmation from a successive down period, so at this stage it should be treated with caution. A correction would likely be met by buying support near the prior breakout point at 103.50.
It should be noted that the monthly US NFPreport due in the coming hours is likely to spark significant volatility for USD/JPY which could negate technical signals offered. Details available on the economic calendar here.
USD/JPY: Bulls Hesitate At 104.00
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to the four hour chart; there are further signs of indecision amongst traders, denoted by an unusually long series of Doji candlesticks near the critical 104.00 level. However, they do little to confirm the Hanging Man formation that had warned of a potential decline.
USD/JPY: Dojis Dominate Denoting Indecision Amongst Traders
Four Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.